The Federal Bank in India has taken significant steps towards Blockchain implementation to improve the remittance system in India. The bank has entered into a partnership with Ripple Inc. for cross-border remittance through its network.
“For long Federal Bank has endeavoured to bring our non-resident clientele closer to their homes. Each of our digital offerings has been designed with this objective in mind,” said Srinivasan, MD & CEO, Federal Bank.
R3’s Corda Platform and Remittance in the Gulf Area
Federal Bank has also initiated a blockchain based plug-in developed on the R3 Corda platform. Croda is an open source blockchain platform that is built for businesses to connect through ‘smart contracts.’ The particular smart contract for Federal Bank in India is built in partnership with R3 and Digiledge.
“This new easy-to-plug-in platform enables exchange houses and banks in the Middle East to connect their existing solutions to make seamless, real-time transactions,” said Srinivasan.
Lulu Exchange, one of the leading financial services company with more than 180 branches worldwide, has gone live with this upgraded cross border remittance platform.
“We are delighted to partner with Federal Bank to roll out the enhanced blockchain technology and VPA system… We are sure these new integrations will ease process and bring further operational efficiency,” said Adeeb Ahamed, managing director LuLu Exchange.
The Yearly Volume of Remittance in India
India retains the top spot in yearly remittance beating China, Mexico, and the Philippines and Egypt. The annual remittance in India during 2018 was estimated to be $80 Billion according to a report by the World Bank. Federal Bank handles more than 15% of the market share in remittances in India, almost $12 billion yearly. Hence, the bank will save substantially in terms of the transaction cost and time of executing transactions.
“Federal Bank is an important part of the remittance eco-system to India, so, it is only natural for us to offer the latest technology to our customers and remittance partners such as exchange houses and banks,” said Srinivasan.
XRP is used as a settlement or intermediate currency by both Ripple and R3. However, it is used in varying degrees by both platforms. Nevertheless, it strengthens the RippleNET which will possibly increase the rate of use of XRP in the future as well.
How much do you think the bank stands to gain yearly from this partnership? Will other Indian Banks follow the Federal Bank?