National Payments Corporation of India (NPCI) is looking to implement blockchain technology to further support the growing use of digital payments in the country.
Blockchain is a distributed ledger technology that validates all the transactions and adds them as blocks. There is no central entity in a blockchain system so nobody can interrupt the digital transactions.
NPCI is an umbrella organization for operating retail payments and settlement systems in India. It is an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) to create robust Payment & Settlement Infrastructure in India.
It focuses on advancing the retail payment systems using the technologies to achieve greater efficiency in operations and broaden the reach of payment systems. Currently, 10 main banks in India are the core promoter of NPCI, including State Bank of India (SBI), Punjab Nation Bank (PNB), Canara Bank, Bank of Baroda, Union Bank, and HDFC Bank.
As reported by Business Today, “NPCI intends to develop a resilient, real-time and highly scalable blockchain solution. It is proposed to develop this solution using an open source technology/ framework/solution.”
For this, the National Payments Corporation of India (NPCI) is floating an Express of Interest (EOI) which will allow bidders to submit proposals to develop blockchain in the payment domain.
According to global consultancy firm PwC, India will be among the territories which will be seen as blockchain leaders by 2023.
UPI in India is gaining significant traction over the last three years. As per NPCI, 142 banks in the country are live on UPI having 1,33,460.72 INR, as of March 2019.
Adoption of blockchain will further accelerate the use of digital payments in India.