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RBI taps top banks for blockchain based trade financing project

June 23, 2022

RBI taps top banks for blockchain based trade financing project
HDFC bank, ICICI Bank and State Bank of India are among nearly a dozen top lenders the central bank is engaging with to run a blockchain-based pilot project centred on trade financing. If successful, it could help prevent loan frauds by the likes of Nirav Modi and Mehul Choksi, fugitive borrowers that gamed the system to siphon off thousands of crores of rupees.

Belgium-based SettleMint, US-based Corda Technologies and IBM would provide technology support for the project driven by the Reserve Bank of India’s (RBI) Innovation Hub in Bangalore, three people familiar with the matter told ET. Axis Bank, Bank of Baroda  and Union Bank of India  are also involved.

The pilot project, called ‘proof of concept’ in industry parlance, will harness blockchain technology where ‘blocks’ of transaction data are stored in ‘chains’ with peer-to-peer access to enhance traceability of money flow.

Different technology providers are engaging with select individual banks under the stewardship of the RBI.

“This is to assess how blockchain can facilitate and secure our banking system,” said one of the persons cited above.

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