India’s oldest depository launches blockchain for bonds

India’s National Securities Depository Ltd. (NSDL) introduced a distributed ledger technology platform for the Debenture Covenant Monitoring system on Saturday to enhance monitoring of bonds.

See related article: Indian market regulator asks depositories to use blockchain

Fast facts

• The Debenture Covenant Monitoring system’s decentralized ledger will provide an immutable and verifiable audit trail of transactions between debenture trustees and issuers. 

• The country’s two depositories, NSDL and the Central Depository Services Ltd. (CDSL), will control the two nodes responsible for network maintenance.

• Other regulated entities may be allowed to control nodes to become part of the ecosystem in the future, said Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch.

• NSDL is India’s oldest depository, controlling 89% of the market share measured in securities assets value. 

• All the information on bonds, such as collateral assets, and asset cover ratio, that was previously stored in centralized databases, will be cryptographically signed, time-stamped and added to the ledger. 

• SEBI directed depositories to employ blockchain for securities and covenants in August last year. 

See related article: Navi files for India’s second blockchain fund