Inland letters of credit (LCs) can be processed using blockchain technology. A consortium of 15 banks have formed a company — Indian Banks’ Blockchain Infrastructure Company (IBBIC) to take care of this. The new system will verify data using GST invoices and e-way bills. Blockchain will avoid paperwork. The transaction time will be reduced. It will be secure environment. The disbursements of domestic LCs used to take four to five days. Instead, it will be done now in a matter of hours.

There will be encryption through blockchains. It is not possible to issue two LCs, or the same set of documents, as it happens now.

The participating banks who hold shares in this company are the RBL Bank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank, Yes Bank, South Indian Bank, Federal Bank and IDFC First Bank. PSUs who hold shares are SBI, BoB and Indian Bank. A foreign bank, SCB, is also a shareholder.

The five member-shareholder directors are from BoB, ICICI, Axis, Kotak and RBL.

Each bank is expected to contribute Rs.5 crore to the new company.