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MudraChain: Blockchain-based framework for automated cheque clearance in financial institutions

2019; Elsevier BV; Volume: 102; Linguagem: Inglês

10.1016/j.future.2019.08.035

1872-7115

Naman Kabra, Pronaya Bhattacharya, Sudeep Tanwar, Sudhanshu Tyagi,

Retinal Imaging and Analysis

Currently, the burden on the cheque clearing houses in financial institutions is increasing day-by-day, which necessitates the upgrading of the existing cheque truncation system (CTS). It is a manual process which uses Magnetic Ink Character Recognition (MICR), where cheques have been scanned and sent to the clearing house for further processing. The limitations of existing CTS are — illegal duplication of cheque images, invisible ink usage, visibility issues in beneficiary name, and amount on the cheque. To handle the aforementioned issues of the existing CTS, blockchain has emerged as a new technology which is a distributed ledger that is timestamped and immutable. Being immutable, forgeries related to images of cheques during clearance cycles are not allowed. This provides trust and consensus among all participating entities in the network. Motivated by the above discussion, in this paper, we propose a framework named MudraChain for automated cheque clearance, where clearance operations are handled by the blockchain network, instead of existing CTS. It includes: (i) A multi-level authentication scheme to make the blockchain-based framework secure and tamper-proof among participating financial stakeholders, (ii) A quick-response (QR) code generation algorithm which performs digital signing of a cheque, and (iii) A novel two-factor authentication protocol to generate a time based one-time password (TOTP) for secure funds transfer. The obtained results are examined against state-of-the-art approaches to indicate the supremacy of the proposed framework. Thus, MudraChain allows a seamless flow of clearance operation via blockchain for the payer and the payee without any intermediaries. Finally, it addresses the requirements of building a secure application for cheque clearance in view of decentralized blockchain 4.0 applications.