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Indian Bank ICICI Executes Blockchain Remittance Pilot

Last Updated March 4, 2021 4:51 PM
Samburaj Das
Last Updated March 4, 2021 4:51 PM

India’s largest private sector lender, ICICI Bank, has tied up with Dubai’s largest bank, Emirates NBD, to develop a blockchain platform to facilitate international trade finance and remittance.

Indian bank ICICI has announced the successful pilot of transactions executed over a blockchain, developed in partnership with Middle Eastern banking giant Emirates NBD.

A custom-made blockchain platform was used for the transactions, developed by a subsidiary of Indian technology powerhouse Infosys.

The pilot transactions saw an ICICI Bank branch in India’s industrial capital Mumbai, remit funds real-time to an Emirates NBD branch in Dubai.

In a statement, the bank noted:

ICICI Bank is the first bank in the country and among the first few globally to exchange and authenticate remittance transaction messages as well as original international trade documents related purchase order, invoice, shipping and insurance, among others, electronically, on blockchain in real time.

The benefit of efficient, near-instance remittance from blockchain technology is one of the innovation’s most telling features, as evident in the use of bitcoin as a transfer of value. For banks and the global finance, blockchain could very well revolutionize the traditionally paper-intensive, time-consuming trade finance process.

An electronic decentralized ledger would enable all participants in an international trade finance transaction – the bank, the importer and exporter to access data in real-time. Documentation and record of authenticable ownership, along with transfer of assets would be streamlined digitally, in real-time, on a tamper-proof ledger.

To demonstrate this, the trade finance pilot saw confirmation to import shredded steel melting scrap by a Mumbai-based firm, from a Dubai-based supplier.

A number of banks and technology companies around the world have already executed trade finance pilots. Some notable examples include that of 15 R3 member banks working on blockchain prototypes for trade finance. In late 2015, London-based Standard Chartered and Singaporean bank DBS revealed a distributed ledger for trade finance.

More recently, Microsoft announced a partnership with the Bank of America, stating its intent to “transform” trade finance with blockchain technology.

Furthermore, ICICI managing director and CEO Chanda Kochhar stated:

I envision that the emerging technology of blockchain will play a significant role in banking in the coming years by making complex bilateral and multi-lateral banking transactions seamless, quick and more secure.

The bank has also revealed that it is partnering with Infosys Finacle, the Fintech arm of Infosys, to develop and trial blockchain solutions in other banking and payment services.

ICICI first revealed its interest in developing blockchain applications in June 2016, when the bank established a ‘digital division’ to harness bitcoin’s underlying innovation.

In related news, Indian bitcoin exchange Unocoin raised $1.5 million in funding, a record for an Indian bitcoin startup, at a time when the country is seeing frenetic growth in bitcoin adopters.

Featured image from Shutterstock.