|BENGALURU: Infosys has created a blockchain-based documenttracking system for trade finance and is implementing the solution with seven private banks in the country —Axis Bank, ICICI Bank, IndusInd Bank, Kotak Mahindra Bank, RBL Bank, South Indian Bank and Yes Bank.|
The solution named India Trade Connect allows banks to track trade documents digitally. Trade financing and associated governance processes were at the heart of the $1.8-billion Nirav Modi-Punjab National Bank scandal, in which fraudulent letters of undertaking were issued to facilitate international trade.
“Trade financing is document-heavy and process-heavy. The blockchain solution allows this to happen in a digitised manner. Because of the network effect, where a buyer, the buyer’s bank, the seller and the seller’s bank are all on the platform, it creates a single source of truth,” Sanat Rao, chief business officer at Infosys Finacle, told ET. Two of the banks have moved to a production-phase of the platform, while the others are still in the testing phase. The platform could be expanded to include international trade transactions.
Rao said Infosys was in talks with other lenders, including the Indian arms of international banks, to join the network. It was talking to lenders in heavy corridors such as Hong Kong and Singapore and for a domestic trade network in Australia. Work on the India Trade Connect platform started last year, company executives said.
“We began with a workshop facilitated by ICICI Bank. It took about six-seven months. We are also in talks with the Reserve Bank of India for this. Regulatory overview of transactions typically happens as a post-mortem but if the regulators are party to the network, they can have a real-time view,” said Rajshekhara Maiya, associate vice-president – Finacle product strategy. The company said it was still early for the platform and that pricing models were still very flexible. Banks pay an initial fee when they get onto a testing environment and then it would be a version of licence or subscription revenue when they start using it.
“We believe this will enable automation, increase transparency as well as enhance efficiency across trade ” Ajay Gupta, senior general manager at ICICI Bank, said in a statement.