On Thursday (March 28), Federal Bank Limited ("Federal Bank"), a major private commercial bank in India, announced that it had partnered with Ripple in order to get access to faster and more secure cross-border transactions.
Federal Bank says that it is "a pioneer among traditional banks in India in the area of using technology to leverage its operations and was among the first banks in India to computerize all its branches."
In a notice filed at the Bombay Stock Exchange ("BSE") on Tursday, Federal Bank informed the BSE that it had "entered into a partnership with Ripple Inc, a blockchain supported global remittance company, for cross border remittance through its network" since "the Ripple platform ensures cross-border transactions much safer and secured."
It also said that this strategic partnership would help Federal Bank "to explore new corridors where Ripple is aggressively pursuing new partnerships." The partnership agreement was signed by Shyam Srinivasan, the managing director and CEO of Federal Bank and John Mitchell, Senior Vice President for Global Sales at Ripple.
Since India's central bank, the Reserve Bank of India ("RBI") issued a statement on 5 April 2018 that asked entities regulated by the RBI to "not deal with or provide services to any individual or business entities dealing with or settling" virtual currencies, it is unlikely that Federal Bank will be using Ripple's xRapid product, which uses the digital asset XRP, in the very near future. It is much more likely that Federal Bank has joined RippleNet, Ripple's global payment network, in order to use xCurrent, "Ripple’s enterprise software solution that enables banks to instantly settle cross-border payments with end-to-end tracking."
According to a report in Gulf News, "the biggest selling English newspaper in the UAE," on Thursday, Federal Bank has "more than 15 per cent market share in remittance to India," and "expects to increase its share of business through more technology-driven solutions for its customers in the GCC region." It seems that Federal Bank became a Ripple customer as part of upgrading its remittance solutions.
Here is how Dilip Rao, Global Head for Infrastructure Innovation at Ripple, welcomed Federal Bank:
Featured Image Courtesy of Federal Bank Limited