Top 15 Indian banks have joined hands to widen the blockchain application to processing of Letters of Credit, GST invoices and e-way bills. This will be a second joint venture by Indian banks after the Bankchain project. These banks have formed a company called Indian Banks Blockchain Infrastructure Co (IBBIC). The 15 banks which are part of this new company are RBL Bank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Yes Bank, South Indian Bank, Federal Bank, IDFC First Bank, State Bank of India, Bank of Baroda, Indian Bank, Canara Bank, and Standard Chartered. Each of these banks will invest Rs 50 million and hold an equal stake of 6.66% in the company. According to reports, the project will make use of Infosys’ Finacle Connect, a blockchain-based platform that enables digitization and automation of trade-related finance processes. The company will have a 5-member shareholders’ directors’ board with representatives from Bank of Baroda, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and State Bank of India. These representatives will be appointed on a rotation basis annually.
It is expected that the project will bring more efficiency, transparency and security into the banking systems. Frauds like issuing fake LCs could be easily prevented with the help of blockchain. The Bankchain project set up in 2017 by SBI and 26 other banks had the mandate to explore and implement a blockchain platform in banking. It has 37 banks as its members from across the world and has developed 8 live projects so far.