What Nirmala Sitharaman Told Parliament On Blockchain Use By Banks – NDTV Profit


What Nirmala Sitharaman Told Parliament On Blockchain Use By Banks

Ms Sitharaman’s comments on blockchain technology usage by banks in India

The government informed the parliament that there are no proposals for a common blockchain-backed platform for banks in India. 

“There is no proposal to set up guidelines or prescribe a model common blockchain technology platform for the banks,” Finance Minister Nirmala Sitharaman informed Rajya Sabha in a written reply.

Ms Sitharaman also informed parliament about the state of blockchain usage by banks in India.

She told the Upper House that only a small number of banks have been using blockchain technology on a small scale. As a result, she added, interoperability is not a major issue between banks.

For those unfamiliar with the term, ‘interoperability’ is a key concept in blockchain technology and refers to the ability of one blockchain to interact with other blockchains.

Sitharaman told Rajya Sabha that a consortium of banks is currently exploring the possibility of using Distributed Ledger Technology (DLT) — blockchain is a distributed ledger — to issue domestic Letters of Credit (LC).

The consortium — Indian Banks’ Blockchain Infrastructure Company (IBBIC) Private Limited — consists of 18 leading Public and Private Sector banks of India.

She said that the consortium was incorporated to provide a platform for exploring, building, and implementing Distributed Ledger Technology solutions for the financial services sector.

While the use of blockchain technology for banking is nascent in India, the Reserve Bank of India has been speaking about it for a while now.

In fact, through “Regulatory Sandbox”, the central bank has provided a platform for testing innovative technologies, products and services like blockchain.

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