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The Institute for Development and Research in Banking Technology (IDRBT), an arm of Reserve Bank of India (RBI), has published a blueprint for the implementation of blockchain technology in the banking sector, Business Standard reported.
The blueprint proposes a broad roadmap for the technology’s adoption across industries and organizational functions. In addition, due to the current lack of regulatory guidelines for blockchain adoption by banks and financial institutions, the blueprint has underscored the need for common protocols which will help ensure interoperability among different entities.
According to Financial Express, IDRBT has been working with the government, banks and industry for developing a blockchain that would serve as a common platform to launch varied applications.
IDRBT has recommended a “collaborative approach” among various stakeholders in a network and called for “a codified set of rules for smooth operations and collaboration.” It has also proposed the setting up of a “governance structure,” led by a steering committee, which will oversee the implementation of a blockchain-based platform.
"Regulatory supervision can also be built in within the governance structure. These steps are expected to help drive increased adoption of new technology among industry participants and continuous valuation and change management will help in bringing in required stability and sustainability of the new framework," the IDRBT document said.
Furthermore, the institute has also proposed creating industry-specific business value framework which will help analyze the suitability of business applications to migrate to the blockchain-based system.
The document said that such a framework would enable prioritizing projects that have high business value and filter out those that are less impactful ones.
IDRBT has been actively looking into the potential of blockchain technology for the past couple of years. It previously came up with a whitepaper titled ‘Applications of Blockchain Technology to Banking and Financial Sector in India.’
In early 2017, the institute announced its plans to test blockchain technology to support framework for digital transactions. It has also been awarded a research project entitled “Distributed Centre of Excellence for Blockchain Technology,” sponsored by the Ministry of Electronics and Information Technology (MeitY), Government of India.
