ICICI Bank working to create common standards for blockchain in trade finance

In a statement on Tuesday, ICICI Bank said it is co- creating a blockchain-based system for trade finance in partnership with other banks through a consortium.

The embattled head of ICICI Bank Chanda Kochhar on Tuesday said the largest private sector lender is working towards creating common standards for adopting blockchain technologies in the banking industry.

“We are collaborating with peer banks and other partners to create a comprehensive ecosystem in the industry using blockchain and evolve common working standards to contribute to even greater adoption,” she said.

It can be noted that, a few domestic lenders like Axis Bank and Yes Bank have already started using blockchain solutions in certain areas, while the largest lender SBI is planning to do so during the current fiscal year.

In a statement on Tuesday, ICICI Bank said it is co- creating a blockchain-based system for trade finance in partnership with other banks through a consortium, which seeks to invite various constituents of trade, including buyers, sellers, logistics partners, insurers and others on to the blockchain ecosystem.

Kochhar, who is currently battling a series of allegations of conflict of interest in the bank’s lending practices with the Videocon group, said her bank has on- boarded 250 corporates on its blockchain platform for trade finance and claimed that this is the largest in the country.

The on-boarded corporates are undertaking domestic or international trade finance transactions using the blockchain or the distributed ledger technology platform, a bank statement said.

ICICI Bank said it has been using blockchain technologies since August 2016, when it became the first domestic lender and one of the few globally to use the platform for international trade finance and remittances.

“The usage of blockchain technology simplifies the paper-intensive trade finance process by bringing counterparties on the same platform, enabling decision making in almost real-time,” its statement said.

It added that usage of blockchain solutions is time and cost-efficient.

Earlier in the day, global rating agency Moody’s acknowledged that blockchain can significantly reduce costs and time involved in cross-border transactions but flagged concerns on it exerting pressure on fees and commissions.

The ICICI Bank statement said its solution digitises paper-intensive international trade finance process as an electronic, distributed and unalterable ledger, and gives the participating entities including banks the ability to access a single source of information.