The Indian Factoring Exchanges – A.TREDs, RXIL and M1xchange – have launched a blockchain-based networking platform which aims to prevent financial frauds and double invoicing issues.
Based on hyperledger fabric, the production system provides a common platform not controlled by any one financial institution to securely and confidentially share information which reduces fraud around receivables financing.
Commenting on the launch Kalyan Basu, MD and CEO of A.TReDS stated, “Our clients are particularly sensitive about their sourcing inputs and we absolutely could not broadcast any of their private information to a shared network. This technology however enables us to work together with the other exchanges to achieve shared goals without sharing a specific data. I look forward to the day when other players in the financial services industry also appreciate the value addition in terms of preventing frauds related to bill discounting and become a part of this system.”
Interestingly, the platform which has been designed and implemented by New York-based MonetaGo, does not involve any use of cryptocurrencies.
The Reserve Bank of India has licensed three entities to provide a more efficient venue to do this: RXIL, A.TReDS, and M1xhange. While A.TREDS is a joint venture of Axis Bank and mjunction services, Receivables Exchange of India Ltd (RXIL) is a joint venture promoted by the National Stock Exchange of India Limited (NSE), a leading stock exchange of India and Small Industries Development Bank of India (SIDBI), the apex financial institution for promotion and financing of the MSMEs in India.
The M1’s Trade Receivables Discounting System (TReDS) is an online exchange being set up under the approval of Reserve Bank of India (RBI) to facilitate discounting of invoices and bills of exchange on a PAN India basis.