Vajra Platform - NPCI

NPCI announced the launch of Vajra, the permissioned blockchain platform. This has been developed primarily for making payments faster, easier, and transparent.

Currently, NPCI has 56 banks as its shareholders and is supported by ten banks, and the names of some of those banks are Punjab National Bank, Canara Bank, Union Bank of India, ICICI Bank, HDFC Bank, etc.

Following are the key benefits of using DLT in the payment processing industry:

1. Minimal reconciliation of transactions, higher resilience, and efficiencies through automation and transparency

2. Near real-time clearing and settlement

3. Minimizing operations and financial risks

4. Economical, immutable, secure and easily accessible

5. Provides a legitimate audit trail 

The Vajra Platform:

Architecture of Vajra:

There are three types of nodes on the platform:

1. Clearing House node (CHN) for NPCI

2. UIDAI node for Aadhaar authentication

3. Participant node (PN) for all banks/ASP/PPI/PSP

Notary Node: Here, a transaction is validated only if the Aadhaar biometric is used for authentication. This node will receive transactions from the clearinghouse node.

Clearing House Node: This node contains the admin rights of this platform and is controlled and maintained by the NPCI. It provides a root-authority-signed TLS certificate from the permissions service of the network to participant nodes.

Participant Node: These nodes are represented by the banks and can receive, post, and view transactions.

How Vajra Works

The five simple steps, as mentioned by NPCI, are:

• When Remitter/Payer/Payee initiates a transaction on their App/MicroATM/ Net banking /POS/ E-comm the request for Payment/ Collection/Deposit comes to the server of the Remitter (or Issuing) bank/Payer PSP/Payee PSP
• Using DLT APIs or Adapters, the bank/PSP nodes receive the transactions and record the same on the DLT platform.
• Smart Contracts running on the DLT platform validates transactions against defined business rules and triggers transactions based on rules.
• On Successful Clearing, transactions (debit and credit) are recorded on DLT. As per viewing rights, Clearing House Node and Participant Nodes see the transaction information recorded on DLT.
• Every 15 minutes, NPCI creates the Clearing files (including fees) from DLT and posts it to the RBI NTRGS platform for Settlement processing.

Benefits of Vajra

Key benefits of Vajra are fast processing, transparency, data security, robust dispute mechanism, and time sensitivity. 

As per the NPCI statements: “No changes are required from the Bank infrastructure. The banks have to whitelist the Vajra adaptor IPs and ports. Banks have to generate the transaction for the corresponding banks, which are part of the POC.”

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Featured Image Courtesy: NPCI

Further Read:

The Rising Significance Of Blockchain In The Banking Sector: https://www.npci.org.in/rising-significance-blockchain-banking-sector

VAJRA PLATFORM - A DISTRIBUTED LEDGER SYSTEM: https://www.npci.org.in/sites/default/files/Vajra%20Paltform%2019%20Nov.pdf