Government-owned State Bank of India (SBI), the largest bank in India, is taking the lead in the launch of a financial blockchain consortium that will include privately-owned banking giants and technology companies.

First announced last week, the SBI is leading the initiative toward a collaborative effort across the banking industry to develop blockchain solutions in finance. Under a common roof, ‘Bankchain’ will see participating banks and technology companies research, develop and implement blockchain applications. The goal is to enhance efficiency while bringing much-needed transparency and security in an industry that has, until recently, largely relied on paper.

A number of blockchain specialists and technology providers and consultants including IBM, Microsoft and KPMG, among others, have signed up as partners, according Indian business daily the Economic Times.

The largest private banks including ICICI, HDFC, Axis, Kotak Mahindra and several others are also participating.

“[W]e have formed a forum which has proposed to start with trade finance and loan documents can be put on the block,” stated M Mahapatra, deputy managing director at SBI, speaking to the publication.

He added:

Being the largest bank, SBI has taken the lead in initiating blockchain, and we are in talks with banks and other companies for this.

Blockchain Development Gathers Pace

The significant Fintech development in India’s colossal banking sector comes in the weeks after reports that 15 of India’s largest bank are coming together to form an interbank blockchain platform.

It is unclear if the project is an extension of the ‘Bankchain’ consortium. However, the SBI’s participation in the interbanking pilot suggests this could very well be the case.

More pertinently, the unified approach toward blockchain development could lead to a standard blockchain model adopted by the country’s banks, a crucial detail if the narrative of blockchain technology transforming the commercial banking and finance sector, is to come true.

A number of participating banks and financial companies have already endeavored to research and explore their own blockchain initiatives.

In the commercial banking space, ICICI announced the results of a successful remittance pilot transaction that saw money transferred instantly across borders to a partner bank in Dubai. Axis Bank and Kotak Mahindra, two privately-owned banks joining Bankchain, have also conducted blockchain pilots.

In broader finance, IBM is establishing itself as a blockchain technology partner for banks looking to digitize and adopt Fintech solutions. The tech giant partnered Mahindra Finance to develop blockchain solutions for supply chain finance in November. Similarly, IBM helped private lender Yes Bank implement a blockchain nodal solution for an automated vendor financing trial with the technology.

More recently, another Indian private bank, Axis, announced that it would leverage Ripple’s blockchain for cross-border remittance transactions.

“Today, there are several banks pursuing individual blockchain strategies” Mahapatra told ET. “These individual initiatives will be meaningful when they are used by all the banks” he added, pointing to the approach taken by Bankchain.