ICICI Bank, India’s second-largest private financial institution, is making significant progress in its blockchain-related efforts that first came to light in 2016. According to a press release issued by the bank April 17, 2018, over 250 of its corporate customers have since “signed up on the Bank’s blockchain application.”
ICICI Bank Continues with Blockchain Drive
After setting up a new division to integrate blockchain technology across its banking services in June 2016, ICICI partnered with EdgeVerve Systems to build a custom blockchain implementation for its application. By the end of 2016, ICICI had executed the country’s first financial transaction on a blockchain in partnership with Emirates NBD. The transaction allowed ICICI to successfully transfer funds in real time from its branch in Mumbai to an Emirates NBD branch in Dubai.
While the details of the blockchain implementation being used by ICICI has not been made public, the bank has confirmed that it is a distributed and immutable ledger, two primary principles of the technology. Transparency, one of the key advantages of using a blockchain, is also said to be in effect. The press release stated:
“It enables all the parties, buyers and sellers across domestic & international locations, all branches and locations of ICICI Bank in the country and overseas, to view the data in real time.”
Indian Banks Increasingly Adopt Blockchain Tech
ICICI Bank is not the only Indian financial institution testing blockchain technology. In fact, almost every single private Indian bank, including Kotak Mahindra and Axis Bank, has announced the development of a blockchain-based application at some point.
Given that the country’s central bank, the Reserve Bank of India (RBI), has openly praised blockchain technology on several occasions, it should perhaps come across as no surprise that public sector banks are also aggressively adopting the technology.
India’s largest government-owned financial institution, State Bank of India (SBI), is spearheading its own blockchain endeavor, albeit in partnership with several other banks, including ICICI Bank. The project, appropriately named ‘BankChain,’ has been under rapid development since February 2017 and boasts ten live projects with 35 local and international partners.
In October 2017, SBI announced that it would be implementing a beta of BankChain’s smart contract feature with KYC to follow soon after. The two programs were expected to be production ready by the end of 2018.
The fate of Digital Currencies is Cloudy in India
The news of increased blockchain adoption by banks in India comes at an unfortunate time when the future of digital currency in the region is uncertain.
According to a statement released by the RBI in early April 2018, “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling virtual currencies.” Since cryptocurrency exchanges need to have business relations with banks to process fiat deposits and withdrawals, the move may very well eliminate the possibility of commercial trading in India.
Nevertheless, considering that the Indian banking system regularly finds itself knee-deep in scams amounting to several millions of dollars, blockchain technology may finally help the sector right its course.