India-based peer-to-peer (P2P) lending firms Faircent, Micrograam and i-lend are exploring the potential of implementing blockchain technology into their systems in order to improve transparency levels.

Economictimes.com reported that these start-ups aim to serve as a “ledger system” to automate and record transactions on their platform. However, they have to wait for approval from the Reserve Bank of India for integrating the technology into their systems.

Explaining the potential of distributed ledger technology, Rangan Varadan, founder of Micrograam said, “This can be done without the use of cryptocurrency. This could be a transformational tool in doing payment transactions.”

Last month RBI released a consultation paper that pointed out P2P platforms cannot directly engage in money transactions between the lender and the borrower, once the credit underwriting process has been conducted.

Rajat Gandhi, founder of Faircent, said that the company is currently exploring blockchain potential and expects platforms such as Azure helping it to integrate the technology in the future.

He said, “In India it is early for us, we need to reach a threshold level of 1-million transactions a day and then it would definitely be viable. We are exploring and researching into its use.” He added, “By the time we get a chance to use it, it is likely that third party providers like Azure will enable us to integrate blockchain technology into our existing system.”

Last week, a fintech report was released by Nasscom and KPMG which said that there is huge scope in understanding the potential of blockchain technology in managing p2p remittances in India.

"Cryptocurrency being introduced in India is highly unlikely and blockchain needs a cryptocurrency in the back end,” said Shankar co-founder of i-lend, as quoted by economictimes.com. He added saying, “It could be a matter of time before the technology evolves and we could integrate it into our system, making automated records of peer-to-peer transactions."