The Reserve Bank of India (RBI) has granted approval for wider adoption of a blockchain-driven financing platform designed by Indian Banks’ Digital Infrastructure Company (IBDIC) Pvt Ltd. The clearance followed successful testing under the Fifth Cohort of the RBI’s Regulatory Sandbox, which was conducted with a theme-neutral approach to encourage diverse fintech innovation.
The central bank confirmed that the product had met all predefined evaluation criteria during the testing phase. Following this recognition, the platform is now eligible for use by banks, non-banking financial companies, and other regulated entities, subject to compliance with applicable laws and guidelines.
Enhancing MSME Financing Through Tokenization
IBDIC’s solution has been positioned as a tool to address the long-standing challenge of affordable financing for micro, small, and medium enterprises (MSMEs) integrated within larger corporate supply chains. The system leverages blockchain technology and smart contracts to tokenize invoices that have been validated by large enterprises, which often act as anchor firms in these networks.
The tokenized invoices serve as verifiable digital assets that represent value addition by smaller suppliers. Using these tokens, lenders can extend credit to MSMEs via a digital marketplace. Once payments are made by buyers, the settlement is processed through tokens, ensuring a faster, more transparent, and fully digitized working capital cycle.
The initiative was developed in collaboration with major Indian financial players, including ICICI Bank, HDFC Bank, Yes Bank, and Aditya Birla Capital.
Only One Firm Clears the Fifth Sandbox Cohort
The Fifth Regulatory Sandbox Cohort was launched in August 2024 after its announcement in late 2023. A total of 22 applicants competed for participation, of which only five were chosen for testing. Among these, IBDIC and Finagg Technologies proposed vendor financing models, but the RBI’s recent update confirmed that only IBDIC’s solution successfully cleared all compliance and structural evaluations.
The success is being seen as an important validation of the platform’s readiness for market deployment. The regulator’s endorsement highlights a shift toward recognizing blockchain-based mechanisms as viable tools for enterprise financing.
Transition to On-Tap Sandbox Framework
In a related development, the RBI has transitioned its Regulatory Sandbox into an “On-Tap” model, moving away from cohort-specific testing. This change, effective from April 2025, enables fintech and blockchain-focused firms to apply for participation at any time rather than waiting for scheduled themes.
Applications must be submitted through the PRAVAAH portal and will be reviewed under the revised Enabling Framework for Regulatory Sandbox introduced in February 2024. This shift is intended to provide greater flexibility for innovators and accelerate the adoption of emerging technologies in the financial ecosystem.
Broader Implications for India’s Blockchain Ecosystem
Industry experts view the RBI’s clearance of IBDIC’s product as a milestone for the adoption of blockchain in India’s regulated financial sector. The decision reflects a growing regulatory acceptance of permissioned blockchain networks and tokenized assets, particularly for enterprise-level use cases.
Observers have suggested that the success of this initiative could open the door for tokenization-as-a-service offerings, decentralized finance tools tailored for small businesses, and further blockchain-based pilots initiated by Indian banks.
With this move, the RBI has signaled that blockchain solutions, once considered experimental, are increasingly being recognized as practical enablers of efficiency and transparency in financing.