if blockchain technology was used for transactions and accounting the fraud at stateowned punjab national bank pnb could have been prevented or at least detected earlier said fintech experts and now more than ever is a time when those in power should understand the need to implement blockchain technology in the indian banking system this is because frauds are on the rise especially in public sector banks according to a reserve bank of india rbi report sourced by reuters through an rti staterun banks have reported as many as 8670 loan fraud cases totalling rs 61260 crore over the last five financial years up to march 31 2017 and with the dust still settling over the rs 11300 crore fraud at pnb an important point to ponder is how the technology used by the bank allowed its employees to bypass the internal system and carry out transactions by issuing fake letters for seven long yearsdiamantaire nirav modi against whom pnb has filed a complaint was allegedly helped by a former bank employee gokulnath shetty he was a deputy general manager in the foreignexchange department in one of its branches in mumbai shetty allegedly issued several fake letters of undertaking lous from pnb without any collateral for modi the bank claims that for seven years the employees then bypassed the lenders internal messaging system in order to avoid detection and placed instructions via the swift global payment system asking overseas branches of indian banks to fork out the cash as loansso how can using blockchain technology prevent such fraudulent activities can it completely get rid of frauds from the banking system what is blockchainblockchain is a digitally distributed ledger system that records an assets movement and ensures pointtopoint tracking of information on transactions that can map its journey the fact that it is a distributed ledger ie a decentralised system makes transacting on blockchain transparent decentralisation is one of the key aspects of blockchain because no single authority has full control over it there is no central point of failure and the entire system operates in the state of consensus making the transactions transparent by storing data across its network blockchain eliminates the risks that come with data being held centrallyhow blockchain can helpblockchain can help the financial industry ensure transparent and immutable transactions jesse chenard founder and ceo of monetago a usbased blockchain firm says what happened at pnb was the result of numerous systemic failures to detect simple human malfeasance these failures would have been easily spotted and prevented on blockchain its surprisingly common for the information settlement mechanism like swift to be on a separate ledger from the payment settlement mechanism which is the system more likely to be scrutinised by the banks internal controls as well as the various audits including inspection by regulatorsa deloitte report from april 2017 states that blockchain potentially provides a solution for banks as it inherently helps eliminate intermediaries maintain immutable log of transactions and also facilitates realtime execution of transactions a