A commercial private bank in India and Ripple have entered a partnership. The partnership between Federal Bank and the settlement system has been established for cross-border remittances. The bank announced on March 28 that they plan on using Ripple’s network.
This is part of a strategic initiative aimed at applying new technologies to the bank’s remittances network. On the same day of this announcement, the bank launched two remittances platforms in the United Arab Emirates (UAE).
These platforms will be used to make payments to India.
One of them will allow Indian citizens, who are not residents in the UAE, to send money to India through exchange houses and banks. The particularity of this approach is that the Virtual Payment Address of the recipient will be used.
Federal Bank is one of the major stakeholders in the Indian remittances market. Reportedly, this bank may control as much as fifteen percent of the remittances. Therefore, it is not surprising that the bank want to explore new technologies including blockchain in order to increase their revenues.
According to the bank, the role of Ripple will be ensuring that cross-border transactions are much safer and secured. This is not the first time a bank uses Ripple for cross-border payment services. In February, BankDhofar, a major bank in Oman, began using RippleNet technology to facilitate remittances to India.