Federal Bank of India, a private sector bank, has entered into a collaboration with Ripple to utilize the latter’s network for cross-border payments. The bank revealed the development through a letter dated March 28.
The collaboration with Ripple is one of the several initiatives taken to employ path breaking technologies to the remittance network of the bank. Notably on March 28, the bank introduced two remittance facilities in the UAE for transferring money to India.
Of the two platforms, one of them will supposedly permit NRI’s (non-resident Indians) in the UAE to remit money through currency exchange firms and banks using the recipient’s Virtual Payment Address.
Federal Bank, which generated $1.5 billion in revenue in 2018, supposedly controls 15% of the Indian payment processing market and is studying how emerging technologies such as blockchain could assist boost its share of business. Federal Bank CEO Shyam Srinivasan said:
“Federal Bank is an important part of the remittance eco-system to India, so, it is only natural for us to offer the latest technology to our customers and remittance partners such as exchange houses and banks.”
The bank stated that Ripple “ensures [that] cross-border transactions [are] much safer and secured.”
As banks around the world are assessing whether any technology could assist in enhancing their cross-border payment services, Ripple has gained traction. Oman’s second largest bank by market capitalization, BankDhofar, started using the platform of RippleNet for cross-border remittances to India in February.
Bangalore will be hosting the fourth and largest of a chain of blockchain proponent campaign events on March 30 and is expected to have a massive public effect due to scheduled involvement of several developers. The public backlash follows a prohibition issued last year by the Reserve Bank of India (RBI), restricting banks and other financial institutions from dealing with cryptocurrency related firms.
