Axis Bank has started cross-border payments over the blockchain using fintech company Ripple’s technology. Axis Bank had partnered with Ripple earlier this year for financial settlements their solution which cuts costs and time in making a cross-border remittance.
Currently, Axis Bank has launched a service for its retail customers in India to receive payments from RakBank in UAE and for its corporate customers in India to receive payments from Standard Chartered Bank in Singapore. The company says that Ripple’s technology can reduce the time for international money transfer to 5-10 seconds from the existing 3-5 days.
The blockchain , the underlying technology in bitcoins and other cryptocurrencies, is a shared digital ledger which is continuously updated with all transactions. This ledger keeps a record of each transaction that occurs across a fully distributed or peer-to-peer network, either public or private.
Ripple uses the blockchain to transfer money but will require banks to become partners. So far, Ripple counts Standard Chartered Bank, Bank of America Merril Lynch, UBS Group, Mizuho etc as partner banks. In October, Ripple hit 100 member mark and most recently it partnered with card network American Express to help Spanish banking group, Santander to allow American Express business customers to make instant and traceable payments to Santander bank accounts in the UK.
Blockchain developments in India
– State Bank of India (SBI), the country’s largest bank, said that it will be deploying a smart contract for KYC solution over the blockchain. This will be deployed over BankChain, a community of Indian and foreign banks which are developing blockchain solutions, BankChain was started in February by SBI and other members include ICICI Bank, YES Bank, DCB Bank, Kotak Bank among others. It has 29 members at the moment.
– YES Bank is using a smart contract developed by fintech startup Cateina Technologies on a blockchain which will allow Bajaj Electricals to process disbursement of funds and discounting to its vendors. It added that it has put in place a detailed roadmap on commercializing blockchain-based banking solutions in India and is exploring use cases for implementation towards ‘Letter of Credit’ and Documentary Collections, Foreign Remittances and Partnering with Correspondent Banks for Trade Finance among others.
– In October last year, ICICI Bank created a blockchain application and piloted transactions on its blockchain network in partnership with Emirates NBD, a banking group in the Middle East. In ICICI Bank, the first transaction on the blockchain was executed to showcase confirmation of import of shredded steel melting scrap by a Mumbai-based export-import firm from a Dubai-based supplier.