The State Bank of India has launched Bankchain, a community of banks in partnership with technology leaders like Microsoft and IBM, aimed at exploring and building solutions using Blockchain to transform the banking sector. The initiative has already attracted other big banks like Axis Bank and Yes Bank summing up to 27 members from India and Middle East. The responsibility to operate Bankchain has been assigned to a startup Primechain Technologies.
Blockchain has become the center of attraction for the fintech sector with cryptocurrency boom this year. Currencies like Bitcoin, Ethereum and Ripple has multi-billion dollar market cap with strong use cases for financial industry. Initially, blockchain will used to manage data like Know Your Customer (KYC) system which will help to prevent frauds and tackle NPAs. The digitally signed documents will be put as a block on the network so that all members can access it. The consortium is already working on its first project called ‘Clear-Chain’, a blockchain for integrated and shared KYC (Know Your Customer), AML (Anti Money Laundering) and CFT (Countering the Financing of Terrorism). Besides ‘Clear-Chain’, the consortium is looking at solving other use cases like cross border payments and asset registry.
In an interview to ET, M Mahapatra, deputy managing director, SBI mentioned:
“Being the largest bank, SBI has taken the lead in initiating blockchain, and we are in talks with banks and other companies for this,“
It is encouraging to see such large scale participation as in order to build a transparent solution, the end-product needs to be used and accepted by more than one bank to make it truly successful. This will help bring out synergy between various individual efforts being carried out by several banks separately.