Eleven Indian banks have partnered in the launch of blockchain-platforms of crediting of small and medium enterprises (SMEs).

As reported by Economic Times, the project is implemented within the framework created by the banking blockchain-Blockchain consortium Infrastructure Company (BIC). Its members are Kotak Mahindra Bank, HDFC, Yes Bank, Axis Bank, Standard Chartered Bank,
ICICI Bank, RBL Bank and South Indian Bank. Three financial institutions β€” IndusInd Bank, State Bank of India and Bank of Baroda are engaged in the work of the Association as invited members.

The blockchain is the platform aims on the one hand to facilitate access of micro, small and medium enterprises in the country to Bank loans, with another β€” to reduce risks for banks. In the first stage, the members of the BIC are planning to launch a single blockchain network for the participants of the supply chains in which large banks will become nodes.

β€œAll these actors in the supply chain, banks, logistics partners, customs and others, have different technology platforms and technical competence. General network blockchain harmonizes requirements and will allow all to see trade flows on a single platform,” explained Director of financial technological initiatives and new business for Bank of Baroda Akhil handa (Handa, Akhil).

Bankers are hoping that the new industry-wide system based on the blockchain, will help them to reduce costs and to increase the depth of coverage of loans, attracting more SMEs to formal credit system. According to the Reserve Bank of India, the volume of outstanding loans of the SME sector is only 17.3 per cent of total corporate debt.

Earlier, India has developed a plan for the implementation of the blockchain in the banking sector and some banks are experimenting with the issue of internal cryptocurrency.