Indian Banks Consortium Blockchain
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India’s First-Ever Blockchain Technology Linked Funding Initiative for MSMEs

11 Indian banks have come together to launch first-ever blockchain technology linked funding initiative for MSMEs to successfully tackle the dual problems of bad loans as well as an increasing list of defaulters.

The 11 banks consortium includes:

  1. ICICI Bank (Core member)
  2. Axis Bank (Core member)
  3. HDFC Bank (Core member)
  4. Yes Bank (Core member)
  5. Kotak Mahindra (Core member)
  6. Standard Chartered (Core member)
  7. South Indian Bank (Core member)
  8. RBL (Core member)
  9. IndusInd Bank (Outside member)
  10. Bank of Baroda (Outside member)
  11. State Bank of India (Outside member)

Reports say these 11 banks will conduct their meetings under a consortium named as Blockchain Infrastructure Company (BIC). The consortium is expected to undertake judicious decision to access public data in a transparent manner. It is believed that this new effort will help in removing asymmetry of information among lenders of MSE sector as well as large corporate.  

Indian Banks Consortium Blockchain

Conclusion

Indian central bank’s (Reserve Bank of India) Deputy Governor Viral Acharya said during a conference that:

“Credit penetration is low for the [MSME] sector where the ticket size is generally believed to be between 10 lakh rupees [about $14,000] and 1 crore rupees [about $140,000]”

ICICI Bank’s head of business technology, Abhijeet Singh, stressed on the fact that this 11-banks consortium will help in removing the communication problems between banks. It went on to say:

“The idea of having such an organisation is to remove any communication hurdle among the different banks. A blockchain network can only thrive if the entire ecosystem is working in synergy through a single network. The core objective of having such a ledger-network is to ensure transparency in credit disbursement, especially in the underbanked section.”

Bank of Baroda’s head of fintech Akhil Handa said:

“A common blockchain network harmonizes the requirements and lets everyone see the flow of the trade on a single platform.”

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