0

Indian consumer electrical equipments manufacturing company established in 1938 — Bajaj Electricals, has started using blockchain technology for paying its suppliers. The blockchain based vendor/supplier financing solution is developed by Yes Bank which the company inculcated into its invoicing and payment system in January this year.

Earlier, for suppliers/vendors, getting paid for the material they supplied to Bajaj Electricals Ltd was a long process that involved several steps that included confirmation of delivery by Bajaj Electricals, raising of a physical bill of exchange by the supplier and submission of invoice and transport documents to Yes Bank Ltd, for payment. And now, with the use of blockchain the manual steps involved in the company’s bill discounting process has been eliminated and the funds disbursement to vendors/suppliers from Bajaj Electricals account maintained by Yes Bank has become automated and paperless as well.

After the implementation of blockchain, the entire process cycle for bill discounting at Bajaj Electricals has come down from four-five days to almost real time, according to Anup Purohit, chief information officer (CIO), Yes Bank, which partnered with IBM and a fintech startup, Cateina Technologies, to develop the solution.

For the “smart contracts” used in the blockchain solution, Cateina has written the software code on top of Hyperledger — an open-source collaboration platform for developing and advancing cross-industry blockchain technologies. There are around 100 members of Hyperledger, and some of its members include Accenture, American Express, Fujitsu, Intel and IBM.

According to Bhanushali, Bajaj Electricals could have used Yes Bank’s application programming interface (API) services to send the invoice details to Yes Bank instead of using blockchain. However, in this process, the transactions are booked in the bank’s system and Bajaj Electricals would have to check the status of the transactions through mails. Hence, he chose blockchain, which has features “like security, distributed ledger accessible to concerned parties and the immutability feature—wherein transactions cannot be tampered with”, all of which “scored over API”.

In India, Yes Bank is not alone in exploring and experimenting with blockchain for supplier finance. Recently, the Mahindra Group and IBM had announced they are co-developing a cloud-based blockchain application that has the potential to reinvent supply chain finance across India.

Notably, RBI’s research arm, the Institute for Development & Research in Banking Technology (IDRBT), has published a report stating that it has tested the blockchain technology for core banking processes in the country so that banks and financial institutions in India could take a look and get ideas for their own blockchain journey going forward

Like this content? Sign up for our daily newsletter to get latest updates.

Comments

comments

Vardaan
Founding editor at IndianWeb2, he's been writing at IndianWeb2 since 2007. Apart from blogging he had a professional career of software developer, Ux developer and search engine marketer in past. His vision of IndianWeb2 has been laid down so as to showcase, encourage and propagate Indian startups, innovation and entrepreneurship ideas.

This Breakthrough Tech Invention Let You Ride Bike Indoors

Previous article

10 Things in Tech You Need To Know Today [20- 25 February]

Next article

Comments

Comments

comments

Leave a reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More in news