SBI to use blockchain for smart contracts and KYC by next month

BENGALURU: India’s largest lender SBI (State Bank Of India) will roll out beta launches of blockchain-enabled smart contracts by next month, according to Sudin Baraokar, head of innovation, SBI. Blockchain-enabled Know Your Customer (KYC) will soon follow suit. These applications are part of BankChain, a community of 27 banks, which have joined hands to explore and build blockchain solutions for banking.

“By next month, we should have two beta production solutions ready for use by the 27 banks. We will also invite further participation. The beta product that will be ready are smart contracts and second is KYC,” said Baraokar.

BankChain was formed in February with State Bank of India is the first member. It now has 22 Indian banks, including ICICI Bank, DCB Bank and Axis Bank and five Middle East-based banks. BankChain has tied up with Pune-based startup Primechai Technologies to create these solutions.

“BankChain is a big move. It is getting all banks together and collaborating. It is also de-risking our investment in emerging tech so that all banks can come and invest at once…we can also share knowledge and reduce the cost. We can also use each other’s technical teams to take this forward. We focused on solutions that the bank does not have…things like smart contracts, which is not regulatory heavy. We focused on those solutions,” said Baraokar, in a chat with ET, at the recently concluded Bengaluru Tech Summit.

Smart contracts are basically contracts which use blockchain, a distributed and decentralized ledger, to maintain contracts between parties. The code and agreements are public, hence traceable and irreversible and thereby do not need any enforcement agency.

“Smart contracts can be used for simple things like non-disclosure agreement… rather than signing forms. A lot of internal processes can be contracted. We do a lot of IT procurement, a lot of it can be implemented using blockchain,” said Baraokar.

SBI is also in the design phase of setting up an innovation center in Navi Mumbai which will explore how emerging technologies such as Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), predictive analytics, etc., can help in easing various processes in banking. The center, which is expected to be completed by mid next year, will house selected startups.

“We are building an innovation center (to explore) AI, ML, blockchain, RPA, visualization, predictive analytics, etc. We will be having zones for these. We can start collaborating and developing these solutions. It is a physical innovation center at our IT headquarters in Navi Mumbai. We are in the design phase. We have allocated a dedicated innovation fund. We expect to see this up by the middle of next year,” said Baraokar. The center will host hackathons, incubate startups and will also bring in vendors and internal talent to guide selected startups.

Source: The Economic Time

World over, banks are looking into blockchain to come up with easy and secure solutions for processes such as peer-to-peer payments, loans syndication, KYC, cross-border payments and virtual currencies.

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Tags: SBI to use Blockchain  | Blockchain  | SBI KYC

Nirmal Kalthiya

I am the Founder of SoftMunch.com which will provide you all types of tech related information. Right now I am pursuing my Information Technology Engineering Degree. I like to know about new technologies and innovative things. If you also want to know about it please subscribe our daily newsletter.

One thought on “SBI to use blockchain for smart contracts and KYC by next month

  • November 20, 2017 at 10:56 pm
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    All said and done, and all these much-hyped innovations notwithstanding, how can the system make the banks (SBI included) more customer-friendly and receptive to the customers’ reactions to their insensitiveness? Why must the senior citizens be compelled to repeatedly visit (SBI) branches to obtain their TDS statements, interest statements instead of being able to get these through e-mails–despite the PM’s Digital Push? When will the branch managers be trained in the culture of responding to the e-mails of customers–even if not HNIs? And, as regards IDBI, will the Banking Secy and the Fin Minister inquire as to what really are the reasons behind this Bank’s refusal to allow customers to be able to contact their respective banks through e-mails and also as to why must the Bank refuse to share the e-mail IDs of the branches/top management? Is there no control of the Banking Div of FinMin over IDBI’s anti-customer policies and culture and total inefficiency?

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