According to reports on Economic Times on January 28, Indian banks are participating on a new platform based on blockchain with the intention of eliminating financing hurdles for micro, small and medium-size businesses (MSMEs). Meetings are being held in which a total of 11 banks including Kotak Mahindra Bank, State Bank of India and ICICI Bank are coming together to discuss the implementation of a platform which will substantially support small scale business to raise funds in a transparent manner. The initiative is being formulated under a union called ‘Blockchain Infrastructure Company.’
The Deputy Governor of the Reserve Bank of India (India’s Central Bank), Viral Acharya said at a conference last week that ‘Credit penetration is low for the [MSME] sector where the ticket size is generally believed to be between 10 lakh rupees [about $14,000] and 1 crore rupees [about $140,000].’ India needs to grow its state-wide use of blockchain technology all through recent years as hostility on cryptocurrency continues.
In the month of June ‘ 2018, Government came out to announce its plans of developing ‘IndiaChain’ (A blockchain project) which will essentially enable state and private entities to develop tools like payment apps along with keeping track of large amounts of data. It was also noted that since cryptocurrencies are in a grey space in India, regulatory efforts are tackling multiple delays.
Following the Reserve Bank of India’s ban on servicing cryptocurrency business last year in the month of July, Kotak Mahindra Bank went a step ahead of the other banks by allegedly blocking private account holders from dealing in cryptocurrency. However, after a few days from that, similar report cropped up which involved the first ever digital bank in India, ‘Digibank’.