The Reserve Bank of India (RBI) has shortlisted five innovative projects centered around blockchain-based lending, asset management, and digital KYC for its fifth sandbox cohort, the central bank announced on Friday.
Epifi, supported by Peak XV and Alpha Wave, will be developing a video KYC solution tailored for non-resident Indians aiming to open bank accounts in India. This Bengaluru-based startup aims to streamline the account opening process by eliminating physical documentation, making it digital, seamless, and faster.
Signzy has proposed a new technology that enables consumers to complete video KYC independently. Currently, regulations require a bank official to be present during the video KYC process, but Signzy’s solution aims to remove this necessity.
While these startups focus on simplifying customer onboarding, Connectingdot Consultancy has been selected for a project focused on credit account monitoring. This solution aims to predict loan defaults and recommend specific risk mitigation strategies.
Significant advancements are being made in the digital underwriting of customers for credit disbursal, with the next wave of innovation focusing on loan account monitoring.
Two other entities—Finagg, an invoice-based lending startup, and the Indian Banks’ Digital Infrastructure Company (IBDIC), promoted by a consortium of 18 banks—will develop blockchain-based lending solutions. IBDIC specializes in creating digital public infrastructure like UPI and Aadhaar, with a focus on blockchain.
Finagg will test a blockchain-based supply chain credit solution for vendors of large enterprises, allowing receivables to be converted into digital tokens against which vendors can secure financing from banks. IBDIC is also working on a blockchain solution to help small businesses within an enterprise’s supply network secure financing from lenders, thus improving MSMEs’ access to credit, according to the RBI.
“Blockchain-based deep-tier financing, combined with tokenization, offers a more efficient and inclusive approach to MSME finance. It bridges the credit access gap and promotes economic growth. There are global precedents where financial institutions and fintechs have unlocked value by tokenizing SME loan portfolios,” said Sharat Chandra, founder of EmpowerEdge Ventures, a startup enabler platform.
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