Three of India’s biggest private lenders ICICI Bank, HDFC Bank and Axis Bank have picked up a stake in blockchain technology focussed start-up IBBIC Pvt Ltd, reported The Hindu.
Axis Bank and HDFC Bank each acquired 50,000 shares, a stake of about 5.55%, INR for 5 Lakh,
the Hindu said, citing stock-exchange filings. While, ICICI Bank has subscribed to 49,000 fully paid-up equity shares of face value INR 10 each of IBBIC constituting 5.44 per cent of the issued and paid-up share capital. ICICI paid INR 4.9 lakh for the shares.
Well, launched in May, the IBBIC platform provides distributed ledger technology for the Indian financial services sector. About 15 banks have joined hands to set up IBBIC, in order to expand the use of blockchain application in Inidan financial sector transactions.
The platform was launched to use blockchain to process letters of credit dubbed LCs for domestic transactions in a first move of its kind in India. The use of blockchain-based technology will remove paperwork reduce transaction time.
Disbursing LCs that takes four to five days can be reduced to few hours using blockchain. According to IBBIC the technology will also bring down fraud as transactions will be encrypted via blockchain and no two LCs can be issued on the same invoice which sometimes happens now.