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India Sees KYC Blockchain Lift-Off via BankChain Consortium

Last Updated March 4, 2021 4:56 PM
Samburaj Das
Last Updated March 4, 2021 4:56 PM

India’s BankChain consortium, a working group of major Indian banks developing blockchain solutions completed its first project ‘Clear-Chain’, a platform to share customer data.

Clear Chain is the product of a banking consortium led by government-owned State Bank of India (SBI), India’s largest bank, which launched the financial banking blockchain working group ‘Bankchain’ in February this year. Although led by a public-sector bank, the consortium also includes India’s largest banks such as HDFC, ICICI, and Axis, among several others. The consortium also includes blockchain specialists and consultants in IBM, Microsoft, and KPMG, among others.

As a permissioned blockchain, Clear Chain will enable banking consortium members who join the ledger to share KYC, ALM and CFT (Know Your Customer, Anti Money Laundering and Countering the Financing of Terrorism) details. The current version of the blockchain facilitates the sharing of suspicious transaction reports, investigation reports, KYC data, and cross-border wire transfer details, , according to the Times of India .

“Once implemented, the benefits of blockchain technology include maximization of efficiency, security & transparency and minimization of fraud,” said Shinam Arora of Primechain Technologies which is powering the consortium.

Blockchain Transformation

India is increasingly becoming a hotbed for blockchain development toward solutions both regionally and internationally. Indian private banks have already trialed cross-border international remittance over a blockchain.

Earlier this year, the research arm of India’s central bank made a significant statement in determining that blockchain technology had “matured” enough to support the digitization of India’s fiat currency, the rupee.

Indeed, India’s largest bank is also looking at blockchain technology as a platform for inward international remittance in what could prove a significant endorsement of the innovative technology. India is notably the largest received of inward remittances in the world.

Sudin Baraokar, head of innovation at the State Bank of India, stated:

We are exploring how blockchain can help in reducing fraud where a borrower takes a loan against the same asset from multiple banks. We are also looking at inward remittances and the use of blockchain as an alternative to systems like SWIFT. We will first look at INR payments where FEMA regulations are not involved.

Featured image from Shutterstock.