Yes Bank is moving forward with efforts to integrate blockchain into its financial services, and reports Tuesday (Jan. 3) said the Indian financial institution has struck its latest collaborative deal as part of this initiative.
According to reports, Yes Bank struck a partnership with Bajaj Electricals to provide vendor financing using a blockchain solution. Transactions involving Bajaj and its suppliers have been digitized, the bank revealed, as the first step to integrate blockchain solutions into those transactions. The aim is to streamline and accelerate the process of providing short-term financing to Bajaj’s suppliers and offer that financing “almost instantaneously,” according to reports.
“This solution enables us to do timely processing of the vendor payments without physical documents and manual intervention. It also enables us and our vendors to track the status of the transactions real-time,” Bajaj Electricals Chairman and Managing Director Shekhar Bajaj stated.
Yes Bank noted that the partnership is part of its broader effort to develop and deploy financial services that use distributed ledger technology.
“There is an over 70 percent cost reduction because of blockchain, and the payback for our investments is six to eight months,” a spokesperson for the bank told reporters.
Typically, the process of providing financing to a supplier takes about four days, reports noted.
Following the partnership with Bajaj, Yes Bank said it will look to launch similar partnerships with other corporate clients. It will also explore the use of blockchain in cross-border payments and will aim to launch initiatives involving global transactions within a month.
Reports noted that Yes Bank is working with IBM in its efforts to deploy blockchain solutions.
“I strongly believe that we are only at the tip of the iceberg and see blockchain, coupled with IBM’s cognitive solution on the cloud platform, making a significant impact in the global transaction banking space,” stated Yes Bank Managing Director and Chief Executive Rana Kapoor.