Institute for Development and Research in Banking Technology (IDRBT), an arm of Reserve Bank of India, is set to test blockchain technology to support framework for digital transactions, as reported by Business Line. The arm will soon roll-out pilots to develop applications for banks to adopt blockchain.

Post the demonetization in India, the government is promoting digital banking transactions and the IDRBT will be working with volunteering banks in order to build applications for the banking sector. The institute also plans to build a small digital currency model using blockchain technology.

“This attribute means a lot for banking and financial transactions. Information has to flow as a chain. No one can change the flow of communication between different stakeholders. It is more transparent, secure and efficient,” AS Ramasastri, Director of IDRBT, told BusinessLine.

IDRBT also said that initially, it will build a trade finance solution with a letter of credit, bill of landing and multi-signature solutions based on blockchain technology.

The institute has come up with a white paper titled ‘Applications of Blockchain Technology to Banking and Financial Sector in India’ during the three-day ‘International Conference on Distributed Computing and Networking’. In order to prepare the white paper, IDRBT took inputs and aid from IT majors such as Infosys, TCS, and IBM Research and roped in private and public sector banks, National Payments Corporation of India (NPCI).