In what could be termed as one of the crucial developments in the Indian banking industry, Federal Bank Limited has joined hands with Ripple for facilitating faster and safer cross border payments. Just so you know, Federal bank is one of the main private commercial banks in India offering banking services primarily in urban areas.
As reported by CryptonewsZ, while making the announcement in this regard, Federal Bank said that it has always remained at the forefront of technology adoption and this new tie-up with Ripple for facilitating faster cross border payments is another first technology adoption by the bank. It also revealed that in the past Federal Bank was the first to computerize all its branches in the country among all the commercial banks operating in India.
The information was revealed by an official notice that the bank has filed to Bombay Stock Exchange (BSE) on Thursday. According to the notice, the bank has entered in a partnership with Ripple Inc, which is widely known for its blockchain technology based remittance services. The reason behind this partnership is the fact that Ripple has a proven track record in providing cross border remittance services with utmost safety and security.
This partnership will also help Federal Bank to explore new destinations as Ripple is aggressively expanding its partnerships across the globe. Experts believe that the nature of partnership is strategic and will bring benefits to both players. The agreement of partnership was signed by the chief executive officer and managing director of Federal Bank, Shyam Srinivasan and Ripple’s senior vice-president for Global sales, John Mitchell.
Crypto Scenario in India
India’s central bank, the Reserve Bank of India in April last year asked all the associated banks and financial institutions not to deal with individuals or companies dealing in virtual currencies. This means it is unlikely that Federal Bank will be going to utilize xRapid service of the Ripple which essentially uses the digital currency. The more likely option will be the use of xCurrent software of the Ripple which allows the bank to instantly settle cross border payments swiftly with a tracking facility.
In terms of market share, the Federal Bank has around 15% share in the overall remittance market to India and this new technology agreement is further going to drive the demand for the bank, noted Gulf News which is the leading English newspaper in the United Arab Emirates. The partnership is expected to bring gains for both the stakeholder and help the Federal Bank to stay ahead of the technology curve compared to its competitors. This development is particularly important given the fact that over on attitude of Indian government towards the cryptocurrency and blockchain technology is still somewhat suspicious. The government authorities are yet to be convinced about the usefulness of digital currencies and clouds of doubt still hover whether the use of cryptocurrency will going to have a negative impact on its own fiat currency. The matter related to crypto and blockchain is sub judice, and it is unlikely that the court will pronounce a verdict in this regard very soon.