Indian multinational, public sector banking and financial services company, State Bank of India ( SBI) has announced plans to launch blockchain-enabled smart contracts and Know Your Customers (KYC) by next month, said Sudin Baraokar, head of innovation, SBI. These applications are part of BankChain pilot projects, a community of 27 banks exploring and building blockchain solutions for banking needs.
BankChain: Blockchain-Enabled Projects
The developments have been made as part of BankChain projects. On February 8 this year, SBI had formed a banking community called BankChain to explore and implement blockchain platform in banking. BankChain is a community of 27 banks from India and the Middle East. ICICI Bank, Kotak Bank, DCB Bank and Axis Bank are also part of this Community. BankChain aims to reduce fraud and maximise efficiency, security & transparency in the banking systems. The community has also collaborated with Pune-based Primechain Technologies.
Conceptualised and developed by Bitcoin founder Satoshi Nakamoto (pseudonym), blockchain is a distributed ledger system managed by P2P network, backed with proof-of-work/validation protocol. Any change in the distributed ledger can’t be done until it gets the approval of the network majority.
BankChain is currently working on a number of pilot projects, which, if successful will be rolled out by the member banks. The active projects include:
- Secure documents
- Peer-to-peer (P2P) payments
- Asset/Charge registry
- Syndication of loans
- Blockchain Security Controls
- Know Your Customer
- Blockchain Libraries
- Virtual currencies
- Cross border payments
- Trade finance
Speaking at the Bengaluru Tech Summit 2017, Sudin Baraokar, Head of Innovation at SBI averred that the bank is currently the biggest blockchain user in India. With BankChain along with Primechain Technologies working on eight applications, banks will soon be able to roll out blockchain-enabled applications. With the blockchain-enabled smart contracts and KYC currently being run in beta mode by BankChain, SBI will soon roll out both these applications, officially.
Speaking to ET, Sudin Baraokar said, “Smart contracts can be used for simple things like non-disclosure agreement… rather than signing forms. A lot of internal processes can be contracted. We do a lot of IT procurement, a lot of it can be implemented using blockchain.”
Earlier limited to cryptocurrencies, blockchain has now been recognised as the latest disruptive technology that could change the way transactions and data-flow records are maintained across diverse verticals such as banking, agritech, healthcare, energy, supply chain and government. With a public sector bank like SBI initiating BankChain projects and leading the blockchain applications in India, and ICICI and Mahindra incubating blockchain startups, blockchain has created a huge horizontal opportunity for startups and entrepreneurs in these verticals.