Infosys sets up blockchain-based trade finance network with seven banks
Indian multinational corporation Infosys Ltd has formed a trade finance network that is based on blockchain with seven private sector banks. They aim to increase security and efficiency in the banking sector along with product offering broadening.
Being the second largest software exporter in India and developer of finacle, core banking product software for universal banking functionality Infosys, will sign up more national and international banks to the network. Senior company executives of Infosys told sources.
Distributed ledger technology increases transparency and ensures security in all stages of transactions. Infosys came up with this innovative project after the agitation caused due to the incident which happened recently, $2 billion fraud at India’s second-biggest state-run lender, Punjab National Bank (PNB) (PNBK.NS), allegedly by two jeweler groups with help from rogue bank staff.
Rajashekara Maiya, Finacle global head of product strategy, said in a telephone interview that the network they developed will allow the transactions to be more transparent for buyers, sellers, buyer banks, the seller banks and any regulator who is a part of the network.
“With that kind of a capability, the technology can avoid all the fraud that could have taken place in a situation like Punjab National Bank,” he stated.
Sanat Rao, chief business officer at Finacle, said lenders presently testing its trade finance networks are ICICI Bank Ltd (ICBK.NS), Axis Bank Ltd (AXBK.NS), Kotak Mahindra Bank Ltd (KTKM.NS), Yes Bank Ltd (YESB.NS), IndusInd Bank Ltd (INBK.NS), RBL Bank Ltd (RATB.NS) and South Indian Bank Ltd (SIBK.NS).
Rao said Infosys is also in talks with other Indian and overseas lenders.
“We’re in very advanced discussions in Australia with a consortium of banks and I think you’ll see more announcements,” he added.
Image source: Infosys