Banking is the first industry which is about to face the greatest change in its functionality because of the use of blockchain. The present banking system in India is not totally free from errors. Blog: https://financebuddha.com/blog/guide-blockchain-technology

1. Blockchain and Banking

2. Banking is the first industry which is about to face the greatest
change in its functionality because of the use of blockchain. The
present banking system in India is not totally free from errors. There
are a few issues associated with the banking system which can be
solved by introducing blockchain in banking.

3. Let’s understand first what are the issues which we have to struggle
with because of the present banking system.
 High Transaction Fee
 Restrictions
 Net Banking Fraud
 Double Spending

4. Here is How the Implementation of Blockchain can help Banks
a) Fraud Reduction
 When the database is owned and handled by a single authority, it
becomes easy for the hackers to hack the whole database.
 But if the same ledger is decentralised and distributed among many
nodes it would be almost impossible to hack the system as any
unauthorised edit in the chain can be noticed by other nodes of the
chain.

5. b) Know Your Customer (KYC)
 The KYC system is introduced in Indian Banks a few years back to
check money laundering.
 With the introduction of a blockchain, the KYC process can be
monitored and adjusted more efficiently from an enterprise-wide
level.

7.  The finance minister Arun Jaitley mentioned the same in his budget
speech on 1st Feb 2018. He said, “The government will explore the
use of blockchain technology proactively for ushering in the digital
economy”.
 This digital land registry system will be allowing people to
circumvent disputes, frauds, and errors.
 Banking is the sector which is going face an entire transformation
by implementing blockchain technology.

8.  The green flag on the use of blockchain technology in the banking
industry was shown by RBI in September 2017 through a conference
organised by IDRBT ( The Institute for Development and Research in
Banking Technology).
 SBI has launched its first blockchain based product which is named as
” Bank-chain”

9. The first project of Bank Chain is – Clear-Chain(c2). This is
permissioned blockchain and can be used for integrating and sharing
valuable data like :
 KYC (Know Your Client)
 AML (Anti-Money Laundering)
 CFT (Countering the Financing of Terrorism)

10.  Investigation reports
 Suspicious transaction reports
 Cross-border wire transfer reports among the participating banks.

11. The Future of Blockchain Technology
The incredible opportunity of decentralisation which is provided by
blockchain enables both business, transactions and operations
become more transparent, flexible, secure and cost efficient.

12. Some of the industries have already started working with this
technology while some others are still either in the development
stage or in beta testing. The potentials of this technology are
almost beyond count.