With an aim to enhance the funding process for small and medium enterprises (SMEs), eleven Indian banks have formed a consortium to develop a blockchain-linked funding system.

The banks that are a part of the consortium include Kotak Mahindra Bank, ICICI Bank, Axis Bank, HDFC, Yes Bank, Standard Chartered Bank, RBL Bank, and South Indian Bank. In addition, few banks such as IndusInd Bank, State Bank of India and Bank of Baroda have also joined them as outside members.

As stated, the blockchain-linked network will allow lenders access the public credit data thereby reducing risks involved and removing the information hierarchy between large corporates and SME lenders needed while lending money.

Abhijeet Singh, ICICI Bank’s Head of Business Technology, has said that the initiative will allow banks to communicate in a better way. He also added that the benefit of having a distributed ledger network is to add transparency in credit disbursements.