Blockchain Adoption by Leading Indian Banks

In the banking industry, blockchain technology has transformed traditional banking procedures and paved the way for increased security, efficiency, and transparency. It has moved beyond its status as a trendy term. Leading Indian banks like ICICI Bank, State Bank of India (SBI), and YES Bank have been at the front of this technological revolution, leading creative blockchain projects to transform the market for banking services.

SBI

State Bank of India (SBI) has been exploring and integrating blockchain technology in various aspects of its operations to foster a more secure and efficient banking environment. Below are some of the key implementations and partnerships concerning blockchain technology:

eRupee by SBI – The UPI Interoperability

SBI Bank, along with multiple other Indian banks, such as Kotak Mahindra Bank, YES Bank, Axis Bank, and HDFC Bank, had introduced a UPI interoperability feature on the digital rupee application. The major development aims to boost the adoption of RBI’s Central Bank Digital Currency (CBDC) pilot project. The feature lets users scan any QR code to make payments through the ‘eRupee by SBI’ application.

• Impact on CBDC Adoption: It is expected that this development will spur the adoption of RBI’s CBDC as it will ride on major Indian bank’s distribution networks. SBI thinks that this integration will have a considerable effect on the digital currency ecosystem, confirming its willingness to implement digital innovations for making the country’s economy non-cash.
• Merchant QR Codes: Notably, merchants will not have to get new QR codes. The only way one can transact using the CBDC is through having a QR code which the shop displays on its storefront. The Scan & Pay feature is expanded in this case as the existing QR code becomes interchangeable across several payment solutions. The banks’ CBDC-eligible clients can also make transactions with funds from their Digital Rupee (CBDC) wallets by scanning the UPI QR code.

ICICI Bank

ICICI Bank has been making strides to incorporate blockchain technology into its operations to enhance the banking experience for its customers. Here’s a summary of how they are implementing blockchain technology based on various sources:

TradeChain: To Manage Clients’ Domestic Trade Transactions

ICICI’s TradeChain is a digital, end-to-end Blockchain solution for managing clients’ domestic trade transactions on an “Open Account” basis and under “Letter of Credit.” The main objective of the solution is to offer customers effective working capital management options. Additionally, it offers digital document presentation, audit trails, real-time transaction tracking, reduced transaction times, and transparency of information. It facilitates the full trade transaction lifecycle, from the issue of the purchase order to its acceptance and from the raising of the commercial invoice to its acceptance and payment.

• Faster Access to Funds: TradeChain, not only makes the trade execution faster but also faster at hand in terms of funding. Delayed processing of documents may result in very long waiting periods for payments during traditional trade transactions. This makes Tradechain efficient in that upon completion of a trade , participants get quicker access to their funds. It especially it enhances working capital management and liquidity, which is important for any business that aims at profit maximization.
• Adoption & Impact: The implementation of TradeChain by ICICI Bank is an enormous move into the future of trade transactions. With this decentralized marketplace where paperwork is done away with, trade is executed faster, funds are available faster, and real-time data is accessible. As it rests upon the foundation of Distributed Ledger Technology, TradeChain is revolutionizing the trading process with unprecedented levels of security, transparency, efficiency, and dependability in this industry.

YES Bank

YES Bank has been integrating blockchain technology into its operations to digitize various banking processes and improve efficiency. Here’s a detailed breakdown of how YES Bank is implementing blockchain technology based on information from multiple sources:

UPI Integration

By integrating the Unified Payments Interface (UPI) with the Reserve Bank of India’s (RBI) Central Bank Digital Currency (CBDC) app, Yes Bank, a well-known Indian bank, has made a big advancement in the payment sphere. Customers of Yes Bank may now quickly scan any UPI QR code using the bank’s Digital Rupee app thanks to this integration, ushering in a new era of digital convenience. Over 260 million Indians already use UPI to make payments, making it a huge success in the country.

• Digital Rupee Features: The Digital Rupee works like physical cash. It ensures that there are settlements, and it is also recognised as a legal tender issued by the government. Through the digital currency, there is no need for any middlemen in the payments procedures. Users will be able to transfer digital rupees using virtual addresses of phone numbers along with creating QR codes with regard to specific amounts.
• Adoption & Integration: The integration is set to speed up the adoption of digital rupee in India to reach almost the level of using physical cash instantly. Yes Bank plans to embed digital currency into day-to-day transactions and revolutionize how people handle it.

In the late 2022, the RBI launched a retail pilot of the digital rupee, highlighting its trustworthiness, security and settlement finality that resembled the features of physical notes. Unlike traditional cash, the digital rupee does not attract any interest. The initiation is expected to inspire increased adoption of the digital rupee consistent with the RBI’s vision of an inclusive and efficient financial system.

These implementations signify a major leap towards digital transformation and operational efficiency, positioning SBI, ICICI Bank and YES Bank, and other leading banks at the forefront of blockchain adoption in the banking sector.

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