Indian Federal Bank Partnering with Ripple
A major private commercial bank in India, Federal Bank announced via an official letter to the Bombay Stock Exchange (BSE) on March 28 that it has partnered with Ripple for cross-border settlements. However, it was not specified whether the bank would be using Ripple’s cryptocurrency XRP in this partnership.
According to local news reports, after the announcement of this partnership, Federal Bank’s shares skyrocketed to its highest in the last 52 weeks.
A Wider Initiative
This partnership with Ripple is actually a part of a larger initiative wherein the bank is looking to apply new technologies for its payments network. Federal Bank, with revenues of $1.5 billion last year, controls about 15% of the remittances market in India.
The 70-year-old bank has 1251 branches, 1655 ATMS and 258 cash recyclers spread across India.
It is now focusing on assessing how new technologies such as Blockchain can help it increase its market share in the country.
To this end, Federal Bank also announced the launch of two more settlement platforms in the UAE (United Arab Emirates) to send payments to India. The bank stated that one of these platforms would let NRIs (Non-Resident Indians) living in the UAE to send money home via exchange houses as well as banks that would use the VPA (Virtual Payment Address) of the receiver.
The Chief Executive Officer of Federal Bank, Shyam Srinivasan the bank was an important part of the country’s remittances eco-system. Therefore, it was natural for it to offer its customers and partners the latest technology in remittances.
With regard to its partnership with Ripple, the bank stated that it would ensure that cross-border transactions would be much more secure.
Gaining Traction with Banks in India
Ripple has been slowly gaining traction with banks across the globe as they assess how the company’s remittances system could improve their cross-border payments systems.
In fact, Federal Bank has become the 5th Indian bank to join the Ripple network. The other four banks are IndusIND, Yes Bank, Kotak Mahindra and Axis Bank.
Outside India, in February this year, BankDhofar, Oman’s 2nd largest bank in terms of market value stated using Ripple’s RippleNet technology for remittances to India.
These developments come despite the anti-crypto stance that the central bank of the country, Reserve Bank of India has adopted. Interestingly enough, while the country’s central bank and government may be anti-cryptocurrency, they have taken a pro-Blockchain stance.