ICICI Bank and Emirates NDB execute India's first blockchain transaction
13 October 2016
ICICI Bank, India's largest private sector lender, has teamed up with Dubai's largest bank, Emirates NBD, for a pilot project that uses blockchain technology for global remittances and trade finance, in what the two banks say, is a first for banks from the Middle East to India.
The two banks have also executed the first blockchain transaction, authenticating remittance transaction messages as well as original international trade documents related to purchase order, invoice, shipping and insurance, etc electronically on blockchain in real time.
Blockchain does away with the need for maintaining a ledger that can be accessed only by one party. It also simplifies the process and drastically reduces the duration of the transaction to few minutes, compared with few days otherwise.
''I envision that the emerging technology of blockchain will play a significant role in banking in the coming years by making complex bilateral and multi-lateral banking transactions seamless, quick and more secure,'' Chanda Kochhar, MD & CEO, ICICI Bank, said.
She said the bank is also looking at expanding the blockchain ecosystem to create common working standards for commercial adoption of the technology.
The project showed banks can significantly cut transaction costs and time, while demonstrating a near real-time transfer of invoices and purchase orders for trade finance purchases, Emirates NBD said.
Blockchain, which is an electronic transaction-processing and record-keeping system, allows all parties to track information through a secure network. It also does away with the need for maintaining a ledger that can be accessed only by one party and instead puts in place a distributed ledger that can be accessed by the counterparty.
Emirates NBD and ICICI are partnering with Infosys Finacle in the pilot project to use blockchain technology across multiple banking and payment services.
A recent PwC survey has found that banks and financial institutions are increasingly looking at adopting and implementing blockchain to improve efficiency.