Crypto-assets have been daunting the Indian banking fraternity for quite some time now. But regulators simply cannot shy away from the fact that cryptocurrencies house the potential of replacing the traditional banking architecture if not for the inherent limitations which gets tagged along. Blockchain technology on the other hand brings along a completely different story which can make banking operations easier in days to come powered by greater financial security and automation. Now whether this will pose as a threat for the labour-intensive working sphere of Indian banking sector is something which can only be answered when the right time comes.
State Bank of India, a renowned state-owned lender is exploring blockchain possibilities in this context for benefitting the public without adversely impacting the employment market. The bank is actually hopeful about the emerging blockchain technology as an exponential employment producer in the banking segment.
Sudin Baraokar, the Head of Innovation for State Bank of India recently revealed to Yourstory at the Blockchain Conclave that:
“We are all striving for inclusion in finance right now, even with the government and public sector. As a bank that works in tandem with both, we would look at how Blockchain technology is helping financial inclusion, which is the bigger goal in the country right now.”
He added that a ‘Bank-chain’ was being formed by SBI which is bringing under its radar all the leading banks of the nation. The participating banks shall brainstorm over the usage of emerging blockchain technology in the production of efficient bankable solutions at affordable costs.
Sudin revealed that:
“By 2030, traditional banking services could cease to exist with Blockchain. All services of banks can be replaced by Blockchain.”
He feels that the end decision of parking one’s wealth needed to be taken by the customers.
“They can store their wealth in a bank account, or they can store it in a Bitcoin. However, they have to figure it out with the potential risks involved with Bitcoins. We don’t stop them, in fact, we ensure we explain the risks to them as our responsibility. However, we don’t recommend Bitcoin.”
While speaking about Bitcoin, he exclaimed that:
“When you say it’s decentralised, it essentially means you don’t need a regulator or an authority. You can do what you want. You don’t need to ask a regulator. It doesn’t make sense.”
He emphasized that developing trust is the top priority of banking sector. Thus, the customers need to be patient about the adoption of blockchain technology by the banking architecture although there are very less signs of cryptocurrencies being shown a green signal by the financial institutions.
Sudin pointed out that:
“We have to abide by the regulations of the government for they hold the authority. We continue our association with fiat currency, and it is not going to end anytime soon. The magnitude of Blockchain is so great that I can create an entire financial stack in few days. Blockchain can simply make things easier by manyfold.”
The State Bank of India has vehemently opposed the usage of cryptocurrencies given its inherent risks involved. However, they have been equally welcoming towards all Blockchain technology based initiatives given its unbridled potential.
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Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.