INDIA’S MUTUAL FUND INDUSTRY MAY BENEFIT FROM BLOCKCHAIN TECHNOLOGY

Navdeep Garg
INDIA’S MUTUAL FUND INDUSTRY MAY BENEFIT FROM BLOCKCHAIN TECHNOLOGY

Introduction

India Mutual Fund Industries

 

The Mutual Fund Industry is all about wealth creation which has had a long successful history. The Mutual Funds started with the formation of Unit Trust of India in 1963 by the Indian Government and the Reserve Bank of India. SEBI (Securities and Exchange Board of India) regulations introduced in 1996 and the exemption of the Mutual Funds from income tax dividends from 1999 were the two fundamental turning points in the Mutual Fund domain.

Basics Of Mutual Funds

It is a financial term which refers to a pool of money accumulated by several investors who invest in securities such as money market instruments, bonds, stocks, and other assets. Mutual Funds are operated by professional money managers. Just like gains and rewards earned over the period of investment, losses are also shared by shareholder participants in equal proportion, i.e. in accordance with their proportion of contribution to the corpus. Mutual Funds are registered with SEBI that regulates security markets prior to the collection of funds from the investors.

Blockchain: A Boon For Mutual Fund Industry

One of the biggest challenges in front of Mutual Fund Industry is the centralized system. Blockchain can be a boon for the mutual fund sector for it needs fast operations, more transparency, automation, and cost savings. Also, it helps mutual fund managers with the investment decision-making process, vital for wealth generation, and protects portfolios from risk. As so many parties are involved in Mutual Fund Sector for signing up a new investor, the transaction times are lengthy and hence it takes three to four working days from the point of subscription to the point of settlement. This makes the investing process slow and this is where blockchain technology comes into the picture.

Blockchain could help in identifying flaws in the decision-making process. Blockchain saves Mutual Fund Industry several crores by predicting a financial crisis, or massive scams and frauds.

Blockchain-based Mutual Fund will provide investors with a digital wallet which will hold their digital identity and the digital currency to be invested in the Blockchain Mutual Fund. Also, it will help eliminate the intermediaries. The KYC and AML checks can be done by the Blockchain-based digital identity and not a third party.

The Information available on the Blockchain is permanent. Hence, permissioned parties can generate their statement of accounts at any time. Incorporating Blockchain technology into a business or industry saves a lot of time and energy which can be used to enhance the customer experience.

In India where dealing with Crypto and Virtual currencies are not allowed, the Registrar and Transfer Agent (RTA) would issue a transaction request to the bank for fund transfer and this happens by means of the smart contract. Blockchain reduces transactional risk and settlement time.

Taking note of these developments, Blockchain may be the best solution to keep track of data in the mutual fund system, as the technology could be relied upon to provide early warnings, accountability, transparency, decentralization, privacy, tamper-resistance and detect flaws in investment processes. If implemented, Blockchain technology could remarkably disrupt the way mutual funds operate, similar to its effect on the finance and banking industry.

Frequently Asked Questions

Providing tailored solutions based on a wide range of blockchain platforms allows us to meet the unique needs of your project. We specialize in Ethereum, a leading smart contract platform, leveraging Solidity for DApp and smart contract development. Our expertise extends to Ethereum-compatible networks such as Binance Smart Chain, facilitating seamless migration. Hyperledger Fabric, a permissioned blockchain framework, and Go and Node.js are used for enterprise-grade solutions.

Smart contracts are self-executing contracts with code that automates predefined actions when certain conditions are met. With our expertise in decentralized applications (DApps), we can create applications that operate on blockchain networks, offering enhanced security and transparency. Providing a controlled and secure environment for your business operations, we deploy private blockchain networks. In addition, we offer token development, blockchain consulting, and custom consensus mechanisms to meet your specific needs. Our technical proficiency and comprehensive blockchain solutions are poised to meet your unique objectives, whether you want to streamline supply chain operations, enhance data security, or explore the possibilities of blockchain-based applications.

Yes, We specialize in providing tailored blockchain development services tailored to the unique and intricate requirements of your project. Expert blockchain developers create custom solutions that encompass smart contract development, consensus algorithms, and decentralized applications (DApps). Our meticulous alignment of blockchain technology with your specific needs ensures the creation of a bespoke solution that maximizes functionality, security, and scalability. Our team has the expertise to deliver precisely tailored blockchain solutions to meet your technical and business needs, whether you require a private blockchain network, a complex DApp, or the implementation of a custom consensus mechanism.

Blockchain services offer transformative solutions with applicability across various industries. Sectors such as finance benefit from enhanced security and streamlined transactions, while supply chain management gains from traceability and accountability. Healthcare leverages data security, and real estate benefits from transparent transactions. Additionally, logistics, government, energy, and entertainment industries can optimize processes, reduce costs, and improve trust and efficiency through blockchain services, making the technology versatile and impactful across a broad spectrum of fields.

The blockchain services industry encompasses solutions and expertise aimed at leveraging the power of blockchain technology. A blockchain is a distributed ledger that offers transparency, security, and decentralization. With blockchain services, businesses can leverage this technology, resulting in several key benefits:

  • Data Security: Blockchain’s cryptographic techniques and decentralized structure enhance data security.
  • Transparency and Trust: A public ledger promotes transparency by recording transactions and data. A transparent company builds trust among users, partners, and customers, which is particularly useful in trust-sensitive industries.
  • Efficiency and Cost Savings: The blockchain eliminates intermediaries, reducing costs and speeding up processes.
  • Decentralized Applications (DApps): Blockchain services can enhance privacy and control over data in decentralized applications. User engagement can be driven by these DApps.
  • Efficient Supply Chain Management: Traceability and accountability are enhanced with blockchain in supply chain management. Fraud and errors can be reduced by tracking products.
  • Scalability: Blockchain services are designed to scale with your business, ensuring that your system can handle growing transaction loads as your project expands.

Navdeep Garg
Article written by

Navdeep Garg

I'm founder and CEO of Revinfotech Inc. I traits in leadership and brilliant practitioner in the Financial Services and FinTech. I helped ban in connecting to the FinTech ecosystem through payment acceptance in blockchain as a service and even help i... read more

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