One of India’s largest private banks, Kotak Mahindra, has just announced that they’re going to use Ripple’s blockchain network, RippleNet, to facilitate inward cross-border remittances.

The bank will be using Ripple’s xCurrent settlement solution to let their customers transact across borders securely, speedily, and cheaply. The company claims this new technology will allow them to close remittance payments in minutes rather than days and with lower fees.

Since 2011 the number of Indians who have a bank account has more than doubled.

India is the number one remittance recipient in the world with $69 billion of inward remittances in 2017. As one of the largest banks in India with over 1,300 branches, Kotak Mahindra adds a large customer base for Ripple.

Through its xCurrent and xRapid technologies, Ripple now counts more than 100 customers for its blockchain technology.

The vast majority of these customers, like Kotak Mahindra, are opting to use xCurrent, which enables cross-border payment flows without using XRP just fiat currency — unlike xRapid, which does use XRP. (Watch Ripple’s CEO Brad Garlinghouse explain the difference between xCurrent vs xRapid in the video below).

In 2017 Ripple opened up an office in Mumbai. They’re eyeing India as a customer not just because it’s top of the charts for inward remittances, but because of its growing banked population. Since 2011 the number of Indians who have a bank account has more than doubled — now more than 80% of Indian adults now have a bank account.

It appears their effort in India is paying off, as Kotak Mahindra is the third bank they’ve announced deals with after going live with Axis Bank in November and announcing a deal with IndusInd in February.


xCurrent vs xRapid

Hear Ripple’s CEO Brad Garlinghouse explain the difference between xCurrent vs xRapid or read the transcript below.


Interviewer: When we read headlines that another bank or another big client has signed on with Ripple. What does that really mean in practice?

Brad Garlinghouse: What it means is that someone has signed up to use our technology to enable cross border payment flows.

I think what the confusion that happens in the marketplace is that our core product kind of our flagship product is called xCurrent.

xCurrent is solving the messaging and settlement problem that exists in the financial system today. Humorously, frankly I point out to people that if the three decide we need to get $10,000 or 10000 pounds to London today the fastest way for us to do that would be to go buy a ticket at EWR or JFK and fly it there. And that’s just a fact.

Obviously, that seems crazy in the world the internet. I can stream video from the space station so what Ripple’s xCurrent is enabling is realtime messaging, realtime settlement between banks.

The confusion that I think people are like well wait a minute. How does XRP fit.

XRP is used in our second product called xRapid. xRapid is solving a liquidity problem. The messaging is I have an existing pool of capital between the bank of Andy and the bank of Dan, big bank, very successful bank. Andy’s bank, a lot of compliance issues.

These two banks are using xCurrent to settle fiat. A key point here. What happens though is that you want to settle with the Bank of Brad. The Bank of Brad is in Argentina and we’re using pesos.

You don’t want to pre-fund pesos in my bank. Part of that is because that requires an outlay of dormant capital, part of that is because you now have a compliance check that you have to do annually, quarterly. There’s costs associated with that.

And if it’s the Argentinian peso you have an inflation problem. So you put $100 million worth of US dollars that are now going to be worth less over time.

What xRapid allows you to do is to have real-time liquidity. The Bank of Andy can sell a dollar, buy XRP.

That XRP can then be moved to an Argentinian digital asset exchange. You can sell the XRP and buy an Argentinian peso and now you have good liquid funds in less than 10 seconds in another market.

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