The Reserve Bank of India has shortlisted five ideas around blockchain-based lending, asset management and digital KYC for its fifth sandbox cohort, the central bank said on Friday.
These included proposals from two major fintech startups, Signzy and Epifi.
Peak XV and Alpha Wave-backed Epifi will be working on a video KYC solution for non-resident Indians looking to open bank accounts in India. The Bengaluru-based startup is seeking to make such account opening digital, seamless and faster by taking out the physical documentation processes.
Signzy has suggested a new technology solution which can help consumers undertake the video KYC through the unassisted route. Under current rules, a consumer must conduct the video KYC with an official of the regulated entity, like a bank, present on the other end of the call.
While these two startups will be working on easier customer onboarding, Connectingdot Consultancy has been shortlisted for a project around monitoring of credit accounts. The solution will try to predict loan defaults by borrowers and suggest specific pathways for risk mitigation.
There is a lot of work happening around underwriting customers for credit disbursal through digital means. The next generation of innovation is happening around monitoring these loan accounts.
Two other entities—invoice-based lending startup Finagg and Indian Banks’ Digital Infrastructure Company (IBDIC), promoted by a consortium of 18 banks—will work on building blockchain-based lending solutions. IBDIC works on building digital public infrastructure like UPI and Aadhaar, but with a focus on blockchain-based solutions.
Finagg will test a blockchain-based supply chain credit solution for vendors of large enterprises. Receivables from these large enterprises can be converted into a digital token against which the vendors can get financing from banks.
IBDIC is also working on a blockchain-based solution that will help small businesses, which are part of an enterprise’s supply network, to get financing from lenders. This solution will help MSMEs access credit, the RBI said.
“Blockchain-based deep-tier financing coupled with utility of tokenisation offers a more efficient and inclusive approach to MSME finance, bridging the gap in access to credit and fostering economic growth. There are global precedents by incumbent financial institutions and fintechs with respect to tokenisation and the value it unlocks by tokenising SME loan portfolios,” said Sharat Chandra, founder of EmpowerEdge Ventures, a startup enabler platform.
