So many situations of NPA’s (Non-Performing Assets) are popping up in India. Powerful people will take a loan from multiple banks and run away before the scrutiny happens. The typical modus operandi in such cases is as follows. Mr. X requires a huge loan of a huge selection of crores of rupees from “A” Bank and requires another loan from “B” Bank while concealing about the first Loan, or by paying huge bribes to cover up such details. He gets two big loans, works to foreign nations, and revel in ever after away.

One fine day this fraud surfaced while audit from your Regulatory body occurred. This scenario reminds us about very infamous Mr X’s of recent years now. Same story with a twist of Blockchain network in place. Now assume the federal government brings all Lender Banks and Regulatory physiques about the same Blockchain network. Some Mr. Y takes a loan of hundreds of crores of rupees from “A” Bank, once his program got approved all the participants of the network will have a duplicate of the approval.

Mr. Y goes to “B” Bank and tries to take another loan while concealing details of earlier loan from “A” Bank. The “B” Bank can check his loan background on Blockchain and can reject. If they still lend him by taking some mementos, which is close to impossible (thanks to the immutable nature of transactions on Blockchain).

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Then once they approve auditor/ Regulatory body can immediately identify and take stringent action against “B” Bank and Mr. Y, well before them departing to safe heavens. Good News is currently India has it’s own Government Live Blockchain network currently for MSME sector. “A trio of Indian government-sanctioned companies built a blockchain network to ensure that if a borrower obtains financing via one of these, the other two will be notified to avoid duplicate financing. It’s the right part of the exchange system they intended to bring lenders together with debtors. “The financial exchange system provides a common platform not managed by anybody financial institution to share information, which reduces fraud.

The Reserve Bank of India licensed the three private companies to generate the platform to facilitate small business loans. The three exchanges are RXIL, A.TReDS, and M1xhange. These exchanges matter some of the largest Indian banks and lots of foreign banks as financing sources. With enough of stories, now let’s begin the journey of Blockchain.

What is a Blockchain? In simple terms, it’s a string of blocks consisting of transactions which can be used to know the complete background of a secured asset. A secured asset could be anything from currency to land deeds, personal details, shipment details, product details (it may differ according to the framework and industry). Each stop will have a hash-code of the previous block, hence forms a chain. Only the participating organizations/ people can access this network.