ICICI Bank executed these pilot transactions via its blockchain network with Emirates NBD on a custom-made blockchain application, co-created with EdgeVerve Systems, a wholly owned subsidiary of Infosys
ICICI Bank has executed transactions in international trade finance and remittance using blockchain technology in partnership with Emirates NBD, a key banking group in the Middle East.
ICICI Bank executed these pilot transactions via its blockchain network with Emirates NBD on a custom-made blockchain application, co-created with EdgeVerve Systems, a wholly owned subsidiary of Infosys.
“ICICI Bank has a rich legacy of leveraging the latest technology to bring in new paradigms in banking. Akin to pioneering new technologies in the country like software robotics, mobility and near-field communication among others, I am delighted that we are the first bank in India and among few globally to set up a blockchain application. We have also marked a milestone by piloting a blockchain network with Emirates NBD as a partner and have successfully executed cross-border open account trade finance and remittance transactions. I envision that the emerging technology of blockchain will play a significant role in banking in the coming years by making complex bilateral and multi-lateral banking transactions seamless, quick and more secure,”said Chanda Kochhar, MD & CEO, ICICI Bank.
“Going forward, we also intend to work on expanding the blockchain ecosystem and create common working standards to contribute to the commercial adoption of this initiative,”she added.
The blockchain application co-created by ICICI Bank replicates the paper-intensive international trade finance process as an electronic decentralised ledger, that gives all the participating entities including banks the ability to access a single source of information. This enabled all the parties, viz, the importer in Mumbai; ICICI Bank, Mumbai; the exporter in Dubai and Emirates NBD, Dubai to view the data in real time. It also enabled them to track documentation and authenticate ownership of assets digitally, as an un-alterable ledger in real time. This facilitated the stakeholders to execute a trade finance transaction through a series of encrypted and secure digital contracts. Further, it allowed each participant to check online the status of the application, transfer of title and transmission of original trade documents through a secure network, while preserving client and commercial confidentiality.
ICICI Bank is the first bank in the country and among the first few globally to exchange and authenticate remittance transaction messages as well as original international trade documents related to purchase order, invoice, shipping & insurance, among others, electronically on blockchain in real time. The usage of blockchain technology simplifies the process and makes it almost instant—to only a few minutes. Typically, this process takes a few days.
It brings in the improved convenience of accurate and quick transactions eliminating manual intervention, courier of paper documents across countries and verification through trade intermediaries. This is in contrast to the current process which involves a complex and lengthy paper trail that requires international shipping & courier. The pilot transaction was executed to showcase confirmation of import of shredded steel melting scrap by a Mumbai-based exportimport firm from a Dubai-based supplier.
The second initiative involved a transaction on the blockchain application that enabled an ICICI Bank branch in Mumbai to remit funds to an Emirates NBD branch in Dubai in real time. It could do so as the blockchain technology is equipped to send real time financial message to the recipient bank allowing the remittance transaction to take place instantly. The pilot transaction eliminates the need for financial messaging between banks and heralds the convenience of instant cross-border remittances for retail customers. Currently, international remittances take a few hours to upto two days. It is also envisaged to reduce the cost of remittance for customers as well as banks.