The Indian banking sector is excited about blockchain technology. Kotak Mahindra Bank has joined the growing list of banking institutions in the country which have started working on the implementation of blockchain technology. Kotak Mahindra Bank, a leading private sector bank in a country dominated by public banking institutions has today announced that it has piloted an end-to-end trade financing solution for one of its clients.
According to news reports, the solution offered by Kotak Mahindra Bank makes use of blockchain technology to reduce the time taken for issuing “letter of credit” to just a few hours from the earlier 20 to 30-day window. In a traditional setup, the verification, approval, and documentation of letter of credit take a long time, based on the geographical location of the parties involved and applicable regulatory processes. However, the use of distributed ledger to record the document at the point of origin by a relevant authority will make it easier for its counterparts in other parts of the world to readily verify the entry, provided they have access to it.
The immutable nature of cryptocurrency blockchain makes it virtually impossible for any third-party or a middleman to alter or issue a fake document resembling the original with malicious intent. Kotak Mahindra Bank, in association with Deloitte, is working with JP Morgan Singapore to facilitate the new blockchain implementation.
This is not the first time an Indian bank has implemented a blockchain solution to cater to one or more of its customers. Earlier this year, another leading private sector banking institution, YES Bank started working with Bajaj Electricals to implement a blockchain based vendor settlement system for the latter.
Indian banking sector as so far forged collaborations with Hyperledger, Ripple and Stellar platforms to create blockchain-powered solutions that can be implemented in their operations. Foreseeing the trend, the country’s leading financial software manufacturers have already extended support for cryptocurrencies and blockchain based solutions on their platforms.
As India’s government weighs in on cryptocurrency regulations, blockchain segment continues to make progress, sending out positive signals about the potential of country’s cryptocurrency market.
Ref: Economic Times | Image: NewsBTC