Indian commercial bank IndusInd has tied up with Saudi Arabian British Bank (SABB) through their partnership with Ripple. The payment remittance corridor between the two countries is powered through xRapid and xCurrent, as both banks adopted both networks, as revealed by Ripple, May 20, 2019.
Further Headway in India
After opening an office in September 2017 and tying up with Kotak Mahindra Bank, Ripple is making headlines in India once again by facilitating instant transfers through a payment corridor run by SABB and IndusInd.
At a Ripple customer event for the Middle East and North Africa, a critical matter of discussion was the necessity to establish efficient remittance mechanisms between the Middle East and India. India received the most remittance volume in the world in 2018 at a whopping $79 billion; this boils down to a large amount of the population being employed abroad and supporting family members within the country.
Soon to be the second largest Saudi Arabian bank, SABB‘s head of global liquidity and cash management, Ghada Al Jarbou, said despite the bank’s size, they had a relatively low presence in regional remittance as most residents used third-party services. The lack of traction is what convinced the bank they had to offer a service that was cheaper and better than that of third-party money transmitters – that’s when they discovered Ripple.
In June 2018, the Saudi Arabian Central Bank chose SABB to be one of the three banks to take part in a Ripple sandbox project. A few months prior to this, IndusInd Bank decided to tie up with Ripple for cross border payments.
According to SABB, opening a corridor in India was necessary and it was also relatively simple given the sophisticated payment infrastructure in the country; working with a bank that already integrated Ripple made the job all the more easier. The first transactions on December 23, 2018, took seven minutes end-to-end and has since reduced to a mere three minutes per transaction.
A lot of people in the community see Ripple as a centralized project that isn’t furthering the agenda of decentralized. While this only holds true in terms of the escrow releases, which saw some issues, and the company selected validators, we cannot go from purely centralized systems to decentralized systems in one day.
Banks and large institutions still need someone to hold accountable; for that reason, Ripple requires a degree of centralization at this point. It can be considered the bridge from total centralization to a much more community driven, distributed ecosystem.