Mining giant Vedanta has raised Rs 100 crore via commercial paper (CP) that was issued by YES Bank on R3's blockchain network. The platform was built by US-based fintech MonetaGo.
The blockchain technology helps automate various processes involved in debt market issuances cutting the time taken to close it from couple of days to an hour.
While blockchain was used to cover only one leg of the transaction--between the bank and the corporate in the first issuance, YES Bank aims to rope in other participants including ratings agencies in 3-4 months.
The private lender also plans to scale up its pay-per-use blockchain network by issuing CPs for more corporates going ahead.
"Apart from reducing operational risk and costs, this technology solution lays the foundation for a more transparent and efficient process to cater to India’s growing CP market," said Asit Oberoi, Senior Group President and Global Head Transaction Banking Group and Chief Experience Officer, YES Bank.
In India, application of blockchain in financial transactions is at a nascent stage. While a number of banks, including the country's largest lender, the State Bank of India are working towards adopting this technology, actual use cases are still very few.
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