Shriram Transport Finance Company Limited (STFC), a vehicle asset financing arm of Shriram Group, launches Blockchain-assured Digital Fixed Deposit (FD) Certificates
It now plans to onboard other Blockchain startups to leverage the technology and to adopt innovations via the new technology
About 19% of the Indian population is without bank accounts and Blockchain technology is expected to help this part of the population create digital identities and help them access banking and financial services
In an industry-first move in India, Shriram Transport Finance Company Limited (STFC), a vehicle asset financing arm of Shriram Group, has launched Blockchain-assured Digital Fixed Deposit (FD) Certificates, as the new technology gains momentum in the country amid growing use cases. The move aims to provide cryptographic security and authenticity on its private Blockchain with seamless customer service.
The company now plans to onboard other Blockchain startups to leverage the technology and to adopt innovations via blockchain. While the company had to wait to go live with Blockchain due to regulatory approvals from the Reserve Bank of India (RBI), it is still the first company to use the technology for storing and processing FD receipts.
While the launch has been announced through STFC, Shriram General Insurance, another subsidiary of the Shriram Group, will also be able to provide FD and RD (Recurring Deposit) certificates using the same tech, sources told Inc42.
Currently, the Shriram FD scheme offers up to 7.75% interest rates, where senior citizens can further avail additional returns of up to 0.30%, above the normal interest rates.
For the digitisation process, STFC has associated with Novac Tech Solutions. It has also onboarded the Chennai-based Print2Block for issuing deposit certificates using Blockchain technology on its Docchain.io platform.
In recent times, frauds regarding FD certificates such as receipt duplication, creation of fake online FDs in the customer’s account while taking net banking and other bank details, have increased as the financial ecosystem is largely going online.
According to the company, as a part of the digital certificate issuance process, customers will be able to access the digital certificate instantly with the help of a trust infrastructure created by STFC where they can download, share or verify the authenticity of the digital certificates at ease.
Blockchain will also create a Global Trust of these FD certificates to make it immutable data on the infrastructure for any future audit.
Blockchain In The Indian Fintech Ecosystem
Globally, India has the highest fintech adoption rate at 87% against a global average of 64%, according to a report. It is expected that the Indian Fintech market, currently valued at $31 Bn, will grow to $84 Bn by 2025, at a CAGR of 22%. However, with the growth, the sector has its own challenges and bottlenecks, and cybersecurity concerns are topping that list.
Blockchain’s decentralised network model means that it is less prone to cyber-attacks as compared to centralized database systems. Some companies have already integrated blockchain into their operations, and higher adoption is anticipated in the upcoming year.
Some use cases of Blockchain in the financial ecosystem are asset digitisation, creation of a consistent financing vehicle, elimination of physical documentation for know your customer (KYC), trade settlements. automated claims processing in insurance, underwriting tokenized reinsurance markets among others that will lead to smart contracts between participants, increased efficiency and transparency while opening up new revenue opportunities.
According to a report, about 19% of the Indian population is without bank accounts and Blockchain technology is expected to help this part of the population create digital identities and help them access banking and financial services. It further adds that 56% of Indian businesses are moving towards Blockchain technology, making the technology a part of their core business.
The central government, which has been sceptical about cryptocurrency, has also been showing interest in adopting Blockchain technology. Last month, it was reported that the central government is eyeing to build a blockchain-based platform that would help government departments, PSUs, banks and investors to verify the authenticity of the information submitted by startups.
Earlier reports have suggested that the Indian government is looking to create a panel that would come up with the roadmap for regulations and the use of Blockchain in India.