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Blockchain hits India shore: Part2

Following quickly on the footsteps of ICICI Bank (Blockchain hits India shore), Yes Bank announced its foray into blockchain. While ICICI started with remittance & trade finance, which is a known use case for blockchain usage in banking (esp in international banking), Yes Bank has implemented it for short term working capital loans. The key drivers for adoption is again significant benefit in TAT (turn around time) and cost reduction in processing. As per the ET report, the bank has digitized its loan process (to Bajaj vendors) for Bajaj Electrical vendors. It is a win-win situation as the bank gets to optimize its cost and increase revenue (loan uptake is supposed to increase with a better process) while Bajaj Electrical vendors gain significantly from faster TAT and process transparency.

What is not said is the 2nd order advantage or a win-win situation that can be derived from the same. If the bank decides to pass on the benefit of cost reduction to its customers, then the vendors can look at a better rate for their loans and the bank can look at a greater volume of loan. Thus the bank ends up creating a real differentiation in the market.

Keep watching this space for more updates as we keep tracking the development in this area for India.

Source: ET News (dated 3rd Jan), accessed as RSS feed from Randomwalks Top News.

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