By next month, State Bank of India (SBI) will launch beta versions of blockchain-enabled smart contracts. The country’s largest lender will also rollout blockchain-enabled KYC (Know Your Customer) soon.
These two applications fall under BankChain which came into existence in February 2017 with SBI as its first member. BankChain now has 27 banks in its community and is open to further participation from more banks. In the community, there are 22 Indian banks and 5 Middle Eastern banks currently. Some of the members include Axis Bank, DCB bank and ICICI Bank. Banks came together to explore blockchain and build suitable solutions for banking around it. In order to create these solutions, BankChain partnered with Primechain Technologies, a startup based in Pune.
Smart contracts will be contracts that use blockchain to maintain contracts between parties through a distributed and decentralised ledger. The contract, code and agreements are made public, so they do not require an enforcement agency because everything is traceable and irreversible.
According to Sudin Baraokar, head of innovation, SBI, a lot of internal processes and IT procurement can use blockchain. Simple things such as non-disclosure agreements can fall under this too. He stated that SBI is building an innovation centre that will enable the exploration of blockchain, artificial intelligence (AI), machine learning (ML), visualisation, robotic process automation (RPA) and predictive analytics. The centre will be based in Navi Mumbai and will research these emerging technologies to help easy numerous banking processes. The new innovation centre will house selected startups, provide an environment of incubation to them and will also host hackathons. It is expected to start functioning mid next year.
BankChain is a strategic and world-changing move. With banks collaborating their resources and investments, the risk and cost of research is reduced. Using each other’s technical teams, new solutions can emerge faster.