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BankChain Project in India Launches Blockchain Exchange For Stressed Assets

Blockchain | Crypto news | Blockchain India | Blockchain startup

India now seems to be progressing at quite a pace, keeping in the mind the blockchain innovations that several companies and financial institutions have been trying to implement. Only last week, SBI was in the news where it has been planning to build its own blockchain technology.

Now, a Mumbai-based startup named Primechain Technologies which operates India’s BankChain consortium, has launched a blockchain system for the trading of so-called “stressed” assets.

The blockchain called Primechain-ASSET, which is the project, will facilitate an exchange for selling and buying stressed assets, said Sudin Baraokar, innovation adviser at State Bank of India, a member of BankChain. Stressed assets include non-performing assets (NPAs), restructured loans, assets under reconstruction and written-off assets.

The blockchain platform comprises a smart contract-powered auction system, built-in regulatory reporting and other features which will allow banks to divide up stressed assets and sell them to other banks, asset reconstruction companies or funds. The blockchain will also offer a repository for documents related to the assets.

Baraokar said,

“This [project] will help banks get a more data and market-driven price discovery of stressed assets and will automate and bring a more orchestrated effort for sale of Non-Performing Assets (NPAs). By leveraging blockchain, we can then continue to develop more structured products once we have a Loan Asset Exchange system in place.”

NPAs have come into limelight recently, as an observed decline in asset quality has been seen as a major economic risk for banks.

Also Read: Blockchain Technology Can Terminate All traditional Banking Services By 2030 Says Sudin Baraokar

Shinam Arora, CEO of Primechain, said in the statement.

“Stressed assets have become a multi-trillion dollar challenge for the global banking sector. The gross non-performing assets of the banks in India are over Rs. 8 lakh crore [$123 billion],” 

In fact last month, the Reserve Bank of India (RBI) issued a reassessed framework for banks, allowing early detection and identification of stressed assets.

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