ATM Reconciliation Process Of India’s Syndicate Bank to Use Private Blockchain Technology


Indian banks may not be friendly towards cryptocurrencies but it sure looks like they seem to embrace blockchain technology. Already banks like ICICI, Axis and Kotak Mahindra have been using blockchain for cross-border remittances and now Syndicate Bank is going to create a private blockchain for ATM reconciliation.

To explain the use case, Managing Director Mrutyunjay Mahapatra, said:

“Say you are a Syndicate Bank customer taking money out of a Syndicate Bank or ICICI Bank ATM. If say you tried to withdraw Rs 10,000 and you get a message saying your account has been debited, but cash has not been dispensed – what do you do?”

The usual system is to report the incident by calling the customer’s bank. Then one has to wait 4-5 working days, as the bank checks its systems to verify if the transaction has occurred or not and then reverse the amount. These extra times adds to the anxiety of the whole situation.

He adds:

“When the ATM becomes a block in a series of transactions, the system would immediately check the opening balance for the day, run through all the transactions that took place since then, and if there is more money in the ATM than what the digital transactions noted, that means it’s obvious your money has not been dispensed. So our system will immediately alert you. Your attempt to withdraw Rs 10,000 has failed as cash was not dispensed. The amount will be reversed back to the account within 2 working days.”

The bank further believes that receiving an instant notification will help the customers have an added sense of security apart from reducing reconciliation time from five to two working days. However, the specifics of the procedure is yet to be announced.

Not only India’s banking sector but also the country’s government seems to be adopting blockchain. In order to empower the unbanked, the government of Telangana, India, has collaborated with Cognito Technologies, a UK-based startup, to offer credit ratings to the population. Cognito Technologies is ready to set up an office in Hyderabad, India this January and employ 15 staff members. It will work with Sthree Nidhi Credit Cooperative Federation Ltd, a government branch that gives affordable credit to members of self-help groups in the country.

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