Federal Bank, a private commercial bank in India, plans to go live with Ripple’s cross-border payments platform by the end of this year.
The bank announced the partnership in March, saying it will use the San Francisco fintech company’s network of banks and financial institutions to “explore new corridors.”
There’s no word yet, however, on whether the institution plans to use Ripple’s native currency, XRP, in conjunction with its platform.
Federal Bank officials say the institution manages about 15% of India’s cross-border remittances. In its 2018-2019 annual report, the institution reports that remittances from the Indian diaspora increased by about 14% and that the bank’s share of remittances grew by 22%.
The Ripple partnership isn’t the only example of Federal Bank’s interest in blockchain.
Says the bank,
“Blockchain as a technology is considered to be a game changer and it is expected to disrupt the technology space soon. [Federal] Bank believes that blockchain as a technology is going to disrupt [the] banking industry and there are many use cases where it can be used effectively to make offerings more efficient.
[Federal] Bank piloted the use of blockchain technology in cross border remittances and launched its first cross border platform based on blockchain in 2017. In 2019, [Federal] Bank revamped the whole platform in association with R3 by Corda and partnered with Lulu Exchange to make remittances to India using this platform.”
The collaboration is evidence that while India remains anti-crypto, with India’s central bank, the Reserve Bank of India, withdrawing support in April of 2018 for customers engaged in any crypto-related activities, businesses are able to explore blockchain solutions for making international payments faster, cheaper, more efficient and secure.
Banks in India are also facing an onslaught of big tech rivals, such as Google. Google Pay has 67 million monthly active users in India and processed $110 billion in transactions in 2018.
Ripple has been pushing to corner the market in India, targeting its population of 1.3 billion.
Last year Ripple’s senior vice president of product Asheesh Birla said he believes the company had already cornered at least half of India’s market.
