The State Bank of India will launch beta smart contracts that are blockchain-enabled in 27 banks next month, according to the Head of Innovation, Sudin Baraokar.
This is major news for India and blockchain as a whole, as the SBI is the largest banking corporation in India, with over $450 billion in assets. As a government-owned entity, it has a vested interest in financial services across the world’s second largest country by population. It also partners major technological firms such as Microsoft.
BankChain Will Collaborate Over Smart Contracts
Through smart contracts, SBI hope to use blockchain for simple yet time-consuming processes, such as non-disclosure agreements and procurement. The 27-bank group is known as BankChain, and will work together to ensure the technology runs smoothly and reduces costs.
The Economic Times of India interviewed Baraokar, who said “By next month, we should have two beta production solutions ready for use…We will also invite further participation.” SBI also plan to open an innovation centre in Mumbai in order to develop their understanding of blockchain further, and to investigate potential new uses in future.
According to Baraokar, “BankChain is a big move…It is (also) derisking our investment in emerging tech, so that all banks can come and invest at once…We can also use each other’s technical teams to take this forward. We focused on…things like smart contracts, which is not regulatory heavy.”
Smart contracts ensure the transparency and maintenance of communication lines between two parties by making code and agreements public on a decentralised ledger. This makes them traceable, which eliminates the need for an external regulatory body. One of the smart contracts that will be tested, known as KYC, will run on the Sawtooth platform, an Intel Hyperledger.