Yes Bank ties-up with Bajaj Electricals for vendor financing using block chain
Posted on:05 Jan 2017 09:34:39
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05 January 2017 Current Affairs: Mid-sized private lender Yes Bank has entered into a tie-up with Bajaj Electricals for vendor financing using blockchain solution, and announced to use the technology more aggressively as it saves over 70 per cent in cost.
As part of the tie-up, the bank has completely digitalised its processes when it comes to transactions with Bajaj Electricals and its vendors in such a way that blockchain solutions can be implemented.
This will help in clearing short-term working capital loans to Bajaj's vendors almost instantaneously as against the present manual practices which take upwards of four days.
Blckchain solutions is a distributed database that maintains a continuously-growing list of ordered records called blocks. The spokesperson said it reduces turnaround times, is transparent and also ensures zero errors.
The bank will now look at deploying the same supply- chain financing solutions with more clients and is also keen on leveraging the benefits of blockchain solution to other areas like international payments and trade finance.
The bank is at a fairly advanced stage when it comes to international payments and is targeting to start processes within a month, while trade finance will take three months .
For the tie-up, the bank was helped by fintech startup Cateina Technologies which developed the "smart contract", and is using a cloud-based cognitive service from IBM.
The bank official said there are significant advantages for Bajaj Electricals as well.
This solution enables us to do timely processing of the vendor payments without physical documents and manual intervention. It also enables us and our vendors to track the status of the transactions real-time .
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