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15 Indian banks form company to process LC using blockchain

Wednesday 16 June 2021 11:42 CET | News

Fifteen banks have formed a new company with a focus on using blockchain technology to process letters of credit (LC) for domestic transactions within India.

Ten private sector banks, four public sector banks, and a foreign bank have forged the Indian Banks’ Blockchain Infrastructure Company (IBBIC). The company’s new system will verify data for invoices on goods and services tax, eliminate paperwork and reduce transaction times, as the press release says. 

While experimentation and execution of LCs on blockchain rails has been done before, IBBIC’s move marks the first attempt for domestic trade finance. Domestic LCs act as sureties for the seller that goods or services will be paid for when they eventually arrive.

A blockchain-based LC system can eliminate fraud due to encryption and the fact that no two LCs would be able to be issued on the same invoice which sometimes happens. The new venture, which will be an open architecture model, is expected to commence within a year, according to the report.

Source: Link


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Keywords: blockchain, banks, partnership, e-invoicing
Categories: Banking & Fintech
Companies:
Countries: India
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Banking & Fintech






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