Tag: Open Banking

A medium-term loan is usually for a period of 2 to 5 years and can be said to be a hybrid of short and long-term loans. Such a loan is often taken for carrying repair or renovation of the fixed asset. For example, modernizing a showroom.

A medium-term loan is usually skipped when talking about the types of terms loans as people may go straight to the long-term loan after discussing the short-term loan. However, it is better to keep the duration of 2 to 5 years under medium-term as terms and condition for such a period is somewhat different from the long-term loan. Like, the interest rate is comparatively higher, while the documentation part is easier when compared to the long-term loans.

Advantages

• The rates of return on MTNs are usually higher than on other short-term investments.
• These notes are custom defined case by case and can be tailored to both issuers and investors needs (within legal requirements).
• For investors, it may serve as a compromise investment opportunity between short-term investments and bonds with long maturities.
• Availability to raise the funds non-publicly.

Disadvantages:

• Higher costs of servicing
• Due to strict issuance documentation requirements, issuers may prefer issuing public bonds instead.

Long Term Loans

These types of term loans are for more than five years. Most of the long-term loans are secured, for instance, home loans, car loans, loans against property. Since the loan is secured, the rate of interest is also lower. However, it can be unsecured as well. In an unsecured loan, no collateral or asset is needed, but the rate of interest is comparatively higher as the lender bears more risk.

EMI for such a loan is also quite low as the payment is spread over a long period. A long-term loan is credit-based, so the better your credit score is, the better are the chances that you get a lower interest rate. The amount of loan will also depend on your credit history and income.

Features:

Lower rate of interest

Since the time period of loan repayment is higher for long-term loans, banks and other lending entities levy lower rate of interest on these loans. Hence car loans and home loans come at lower rates than personal finance.

Higher loan amounts

Long-term loans generally come with higher loan amounts. Hence, home loans, auto loans etc. offer hefty loan amounts as compared to short-term loans like personal loans. Since, these loans are mostly secured via collateral submission hence banks are not apprehensive in lending heavy loan amounts to long-term loan applicants.

Collateral Submission

Since the loan amount involved in long-term loans is way higher than other types of loans, collaterals are almost always required to be submitted to the bank. This helps banks in recovering lost cash in case a borrower defaults to repay the loan.

Tax Benefits on long-term loans

Tax benefits are applicable on long-term loan repayment. However, this depends upon the type of loan. For example, an auto loan is a luxury loan and hence it does not offer any tax rebate whereas home loan is a loan for the basic need of housing and as such offers tax exemption on the repayment of loan. These tax benefits are subject to laws under the Income Tax Act.

Repayment in installments

Repayment of long-term loans generally happens in equated installments spread over a substantial period of time. These monthly installments are generally made up of two components, principal and interest.

Example:

Home loans

Home loans are one of the most suitable examples of long-term loans. The tenure for home loans goes much beyond 3 years and the loan amount is considerable. Collaterals require to be submitted to the bank and a guarantor also is required to sign the loan application. These loans offer pre-closure option to customers and depending upon the lending bank, this option may be charged or not charged. Home loans also give buyers the option of choosing between fixed and floating rate of interest.

Education Loans

Education loans or student loans are generally granted for a long period of time especially for courses like engineering and medical. These loans offer a longer repayment tenure to applicants. These loans are taken for a period of more than 3 years and this can go up to a period of 30 years. Education loans can be taken by applicants who wish to go for higher studies in India as well as abroad. The loan amount limit and the rate of interest might differ according to the lending entity as well as according to the course for which loan is being sought.

Personal Loans

Personal loans that offer a repayment tenure of more than 3 years come under the category of long-term loans. However, even when these loans are longer in tenure, the rate of interest offered is not low because personal loans are mostly unsecured loans and as such borrower does not need to submit any collateral as security. Banks do not have any collateral to fall back on in case a borrower defaults to pay back his/her personal loan.

Car Loans

Car loans have slowly become the most necessary loan instrument in recent times. Since the time banks eased the process of obtaining credit for purchase of vehicles, taking car or auto loans have been on the rise. Cars are considered as luxurious items and as such rates offered on these loans are higher than those for home loans. However, stiff competition among lending entities have forced banks to lower the rate of interest for car loans. A typical car loan may have a long-term payment tenure of up to 7 years. Pre-payment of loan is available for car loans and is subject to a pre-closure fee in case of certain banks. On the other hand, some banks do not levy any penalty fee on pre-payment of car loan amount.

Mobile Banking

It has been predicted that by 2025, approximately 4 billion people will use mobile banking and the users will be able to use apps to track, transact and spend from their apps. Apart from just attracting customers with the ease with which the apps work, the exposure to these apps also attracts prospective employees. All employees want to work with an employer who is represented by cutting edge technology and attractive apps.

Mobile Payments

A large number of users are now using mobile apps to make bill payments for various utilities like phone use, electricity bill, credit card bill, etc. This can easily be done through apps for mobile services. Payments always involve some amount of confidentiality and privacy. Apps help the users to keep the information confidential and safe. As the connectivity across areas and platforms is increasing, the mobile apps help the customers to transact with minimal effort and maximum confidentiality. Apart from this, mobile apps also provide many different ways to make the payment:

• Netbanking
• Credit card Payment
• Debit card Payment
• Mobile Wallets

Increase Business

Mobile Apps also ensure that the financial sector enterprise has maximum business. By making the business more accessible, mobile apps have ensured that the business captures maximum market share and increases sales. By providing safe and secure transactions, mobile apps have strengthened the bond between existing customers and the business as well. This ensures continued patronage and work. Mobile applications from finance organizations can supply underserved clients with a means to manage and leverage investment or business opportunities.

Reduce Operational Costs

The use of mobile apps has also ensured that the operational cost of running the business has been reduced. Mobile apps provide one-stop shops for buying, returning, acquiring, exchanging, and remitting of goods and services. Apart from this, mobile apps have also ensured that there is a seamless, virtual transfer of data from the customer to management and vice versa. Mobile apps have made space for virtual customer help stations and have reduced costs further.

Following the markets

Mobile apps in financial categories may send real-time stock and market warnings to the users’ mobile devices via push notifications. Thus, users may be informed about the performances of the investments anytime. In the finance sector in which responding quickly is important, institutions which have their mobile apps may often be preferred by the users.

Current account

Current bank account is opened by businessmen who have a higher number of regular transactions with the bank. It includes deposits, withdrawals, and contra transactions. It is also known as Demand Deposit Account.

Current account can be opened in co-operative bank and commercial bank. In current account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques. Cheques received from customers can be deposited in this account for collection.

In India, current account can be opened by depositing Rs.5000 to Rs. 25,000. The customers are allowed to withdraw the amount with cheques, and they usually do not get any interest. Generally, current account holders do not get any interest on their balance lying in current account with the bank.

Current account holder gets one important advantage of overdraft facility.

Features of Current Bank Account:

• Current bank accounts are operated to run a business.
• It is a non-interest-bearing bank account.
• It needs a higher minimum balance to be maintained as compared to the savings account.
• Penalty is charged if minimum balance is not maintained in the current account.
• It charges interest on the short-term funds borrowed from the bank.
• It is of a continuing nature as there is no fixed period to hold a current account.
• It does not promote saving habits with its account holders.
• Banker requires KYC (Know your Customers) norms to be completed before opening a current account.
• The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly.
• There is no restriction on the number and amount of deposits.
• There is also no restriction on the number and amount of withdrawals made, as long as the current account holder has funds in his bank account.
• Generally, bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts.

Advantages of having a Current Account

1. Current accounts allow handling of large volumes of receipts and/or payments systematically
2. Under these accounts, limitless withdrawals are allowed in line with the levied cash transaction fees.
3. There are no restrictions applied on the deposits made into the current accounts opened at the bank’s home branch. Additionally, account holders can also deposit cash at other branches upon paying small fees as applicable.
4. Cheques, pay-orders, or demand-drafts can be issued via a current account for making direct payments to creditors.
5. Overdraft facilities are also available for current account holders.
6. The presence of small interest earnings on account balance makes a current account all the more attractive for its users.
7. Businesses are further advantaged with various other benefits in the form of free inward remittances, deposit and withdrawals at any location, multi-location transfer etc.
8. The businessmen can withdraw from their current accounts without any limit, subject to banking cash transaction tax, if any levied by the government.
9. Assists creditors of the account holder who can have access to information on the account holder’s credit-worthiness through inter-bank connection.
10. It facilitates the industrial progress of the country. Without its help, businessmen would face difficulties in running their businesses.
11. Provides with Internet-banking and mobile-banking to enable businessmen carry out important business transactions promptly and with ease.
12. It also provides various other advantages (benefits) such as:

• Deposit and withdrawal of money (cash) at any location.
• Multi-location funds transfer.

Term Deposits

Term Deposits, popularly known as Fixed Deposit, is an investment instrument in which a lump-sum sum amount is deposited at an agreed rate of interest for a fixed period of time, ranging from 1 month to 5 years. Term Deposits can be availed at financial institutions like Banks, Non-Banking Financial Companies (NBFC), credit unions, post offices and building societies.

Characteristics of Term Deposits

Term Deposits have unique monetary features that have made them popular among the investment circles. The essential characteristics of term deposits are:

• Safety of investment: Since interest rates of the term deposit are not affected by the changes in the economy, it is one of the safest investment options available.
• Fixed rate of interest: The rate of interest for term deposits are fixed and are not subject to fluctuations in the market.
• Present investment period: The investor has the freedom to choose the tenor of the investment based on the plans offered by the financial institution. Normally the interest rate offered by the institution will be higher for a longer tenor. But it is advisable to compare the interest to tenor ratios before making the investment.
• Interest Payment: The investor has the option to choose to receive the interest income either on maturity or periodically; Monthly, quarterly or yearly.
• Rollover: An investor who does not require their money on the maturity of the term deposit has an option to roll over the deposit for a fresh term. ‘Rollover’ refers to the reinvesting of maturity proceeds in a new term deposit and adding on to the interest. So, an investor doesn’t have to utilize their money as soon as the term deposit matures.
• Wealth Generation: The stable interest received on the investment ensures that the investors’ wealth grows even during difficult times in the market.
• Penalty on premature withdrawal: Since term deposits come with a fixed tenor, it is considered ‘locked-in’. If the investor opts to withdraw from the deposit before the lock-in period ends they are liable to pay a penalty to the financial institution along with lowered interest income.
• Loan against deposit: If in a contingent situation the investor needs financial liquidity, they can avail a loan of up to 60-75% of the deposit amount.
• Taxation on interest: Under the Income Tax Act, the interest earned on the deposit is taxable income and can be subject to a Tax Deducted at the Source (TDS).
• Insurance on deposit: Under the RBI regulations, any deposit in a certified bank is eligible for an insurance cover of up to Rs 1 lakh under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
• Low investment limit: The lower limit of investment varies as per the financial institution, but the lower limit is generally Rs 1000. Although, there is no upper limit on how much can be invested in term deposits.

Types of Term Deposit

• Sweep-in facility term deposit: Sweep-in is a feature that financial institutions provide where the individual can set an upper limit on their savings account. Any amount higher than that limit will be converted into a term deposit. If the savings account faces deficit, then the funds will be withdrawn from the term deposit with a loss of interest only on the funds swept in. Sweep-in term deposits usually provide a higher interest rate.
• Cumulative and Non-Cumulative deposits: Cumulative term deposit is an option provided for investors who don’t need regular monetary income from the deposit. Hence, the interest earned is reinvested into the deposit and paid out as a lump sum at the end of the tenor. A non-cumulative term deposit is for investors who are looking for a regular interest payout. With a non-cumulative term deposit, the interest will be credited in the investor’s account at regular intervals; Monthly, quarterly or yearly.
• Short-term and Long-term deposits: These term deposits have been classified based on the holding period of the investment. A short term deposit has a lock-in period ranging from 1 to 12 months. Short term deposits are ideal for investors looking for quick returns. Long term deposits have a lock-in period ranging from 1 to 10 years. These deposits provide a higher interest rate than the short term deposits.
• Senior Citizen term deposits: An individual over the age of 60 years is considered a senior citizen. Most banks or financial institutions provide a higher interest rate on term deposits for senior citizens. Senior citizens are also eligible for tax-saving term deposits at some banks.
• Special deposit schemes for children: There are a few special deposit scheme aimed the welfare of children. ‘Sukanya Samriddhi Account’ launched by the government aims at improving the financial stability of girl children above the age of 10 years. Different banks have different schemes focussed on the financial welfare of children e.g., ‘Sishu Mangal’ deposit scheme by Allahabad Bank, Balika Shiksha Scheme by Punjab National Bank etc.
• Post Office Time Deposit: Post offices also provide certain financial services. One such service is the Post Office Term Deposit. It can either be opened as an individual or joint account. One can transfer their post office term deposit accounts from one post office to another or own multiple accounts in the same post office. The minimum limit for the deposit is Rs.200 and the current interest rate is 7.9% for 5 years. Any deposit for a tenor longer than 5 years is eligible for the tax benefits prescribed under Section 80C of the Income Tax Act, 1961.
• Tax-saver term deposits: Tax-saver deposits are eligible for a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. These tax saver term deposits have a lock-in period of 5 years and any income above Rs 40,000 is taxable. The usual interest rates range between 5.5%-7.75%.

The Eurobond market is made up of investors, banks, borrowers, and trading agents that buy, sell, and transfer Eurobonds. Eurobonds are a special kind of bond issued by European governments and companies, but often denominated in non-European currencies such as dollars and yen. They are also issued by international bodies such as the World Bank. The creation of the unified European currency, the euro, has stimulated strong interest in euro-denominated bonds as well; however, some observers warn that new European Union tax harmonization policies may lessen the bonds’ appeal.

Eurobonds are unique and complex instruments of relatively recent origin. They debuted in 1963, but didn’t gain international significance until the early 1980s. Since then, they have become a large and active component of international finance. Similar to foreign bonds, but with important differences, Eurobonds became popular with issuers and investors because they could offer certain tax shelters and anonymity to their buyers. They could also offer borrowers favourable interest rates and international exchange rates.

Notes Market

The primary objective of the issuance of Euro notes is to structure a debt instrument with short term maturities, generally 3, 6 or 9 months, tenors (duration) and place it in the market. However, the borrowing programme could be for medium or long term (say), 5-7 years or more. Banks that act as financial Market intermediaries agree to underwrite the paper (instrument). In reality, a borrower is able to borrow at short-term interest rates for short periods by issuing the “notes” ‘to investors. At the same time the borrower avails of the benefits and comfort of having a committed medium to long tern borrowing facility (underwritten by banks). The funding portion is divided into two separate components. The first, is a long term committed standby lending facility provided by banks. The second is a mechanism for the distribution of short-term debt instruments (the Euro note). The former component gives the borrower the long term assurance of availability of funds. The latter is the means by which cost-competitive funding can be achieved (since at any specific time, short term funding is usually cheaper than medium-long term funding).

Types of Euro Bonds

Straight Bond: Bond is one having a specified interest coupon and a specified maturity date. Straight bonds may issue with a floating rate of interest. Such bonds may have their interest rate fixed at six-month intervals of a stated margin over the LIBOR for deposits in the currency of the bond. So, in the case of a Eurodollar bond, the interest rate may base upon LIBOR for Eurodollar deposits.

Convertible Eurobond: The Eurobond is a bond having a specified interest coupon and maturity date. But, it includes an option for the hold to convert its bonds into an equity share of the company at a conversion price set at the time of issue.

Medium-term Eurobond: Medium-term Euro notes are shorter-term Eurobonds with maturities ranging from three to eight years. Their issuing procedure is less formal than for large bonds. Interest rates on Euro notes can fix or variable. Medium-term Euro-notes are similar to medium-term roll-over Eurodollar credits. The difference is that in the Eurodollar market lenders hold a claim on a bank and not directly on the borrower.

Benefits to Investors

The main benefit to local investors in purchasing a Eurobond is that it provides exposure to foreign investments staying in the home country. It also gives a sense of diversification, spreading out the risks.

As mentioned previously, Eurobonds are pretty cheap, with a small face value and are highly liquid.

If a Eurobond is denominated in a foreign currency and issued in a country with a strong economy (and currency), then the bond liquidity rises.

Benefits to Issuers

A list of benefits to Eurobond issuers consists of the following:

• A country choice with lower interest rates.
• Flexibility to choose a favorable country to originate bonds and currency.
• Avoidance of currency risk or forex risk by using Eurobonds.
• International bond trade despite being issued in a certain country that broadens potential investor base.
• Access to a huge range of bond maturity periods that can be chosen by the issuer.

IMPS (Immediate Payment Service) is a real-time interbank electronic funds transfer system that enables instant money transfers 24/7, including on holidays. Launched by the National Payments Corporation of India (NPCI) in 2010, IMPS allows users to transfer funds using mobile phones, internet banking, and ATMs, making it one of the most convenient modes of payment in India.

IMPS offers several advantages over traditional banking systems like NEFT or RTGS, such as immediate processing, 24-hour accessibility, and the ability to transfer funds to both bank accounts and mobile wallets. It supports both intra-bank and inter-bank transfers, making it suitable for sending money across different financial institutions. Users need only a mobile number linked with the bank account (via MMID or mobile number) to send funds, and the entire process is completed within minutes.

IMPS is regulated by the Reserve Bank of India (RBI) and supports small-value transactions as well as high-value ones, depending on the customer’s bank policies. The system is accessible through multiple platforms such as SMS, mobile apps, and online banking. One of its key features is that the sender and recipient do not need to have the same bank account, as long as the transaction is routed through IMPS-enabled bank networks.

IMPS has revolutionized digital payments in India, offering a secure, fast, and efficient means for individuals and businesses to conduct real-time financial transactions without the usual delays seen in traditional banking methods.

Benefits of IMPS (Immediate Payment Service)

• Instant Fund Transfers

IMPS is designed for real-time processing, meaning that fund transfers are completed almost instantly, unlike other systems like NEFT or RTGS that may take hours or even days. This immediacy is particularly valuable for emergency situations and urgent business payments4/7 Availability

One of the most significant advantages of IMPS is its round-the-clock availability, including on weekends and holidays. This ensures that transactions can be made at any time, offering unmatched convenience compared to traditional banking services which have specific operating hours .

• Across Multiple Channels

IMPS can be accessed through multiple platforms: mobile apps, internet banking, SMS, and even ATMs. This multi-channel accessibility makes it easy for users to initiate transactions from virtually anywhere and at any time .

• Low-Cost

IMPS offers affordable transaction charges compared to other payment systems like RTGS. This makes it a cost-effective option for both individuals and businesses, especially for small-value transfers.

• Mobile Number Bases

IMPS allows users to send funds using a mobile number linked to a bank account (through MMID), reducing the need for complicated bank account details. This simplifies the process, especially for those who are not as familiar with traditional banking systems.

• Secure Transactions

Highly secure, leveraging the latest encryption and security protocols. This ensures that all payments are safeguarded against fraud and unauthorized access, which is crucial for maintaining trust in the system.

• Supports Both Small and Large Transactions:

Accommodates a wide range of transaction values, from small remittances to larger business payments. Banks may have their own limits, but the flexibility of the system allows for scalability across diverse user needs.

• Convenient for Bill Payments

IMPS can also be used payments, such as utility bills, mobile recharges, and subscription payments, offering users a fast, easy way to handle their recurring payments without delays.

Features of IMPS

The IMPS payment facility offers a number of features that are highly beneficial in the digital world. These are listed as follows:

• Supports dual platforms:

IMPS payment transfer facility can be accessed as per the user’s convenience on the dual platforms of mobile and the web. This means that IMPS can be used through a mobile app or through accessing the internet through any other medium. However, it must be noted that using IMPS via the web might require you to provide additional details.

• Instant Fund Transfer:

IMPS transactions are quick and fast. This is because the IMPS transactions are made instantly, without any hindrance. Even in case of technical errors, it doesn’t take more than an hour for the successful transfer of funds via IMPS.

• Availability:

The best part about IMPS payments is that funds can be transferred anytime. Thus, the user is not bound to remember the bank or public holidays to make a transfer of funds. IMPS payments are available 24*7 and 365 days in a year, irrespective of a Sunday or any holiday.

• Safe and Secure:

IMPS transactions are safe and secure in comparison to physical transfer of funds using deposit slips. This is because IMPS can be accessed at the comfort of one’s privacy, while transferring funds via deposit slips might prompt frauds to misuse various information. In addition to that, it must be noted the IMPS transactions are protected on the internet using the end-to-end encryptions and firewalled servers. Thus, they are safe and secure in every sense.

• Multiple Confirmations:

On successful payment of funds via IMPS, the user gets a confirmation from the bank as well as from the mobile banking application. Further, the details regarding the credit and debit of funds are sent to both the receiver and the sender. Thus, there is the least chance of confusion.

Unified Payments Interface (UPI) has become a cornerstone of India’s digital payment ecosystem, facilitating instant real-time transactions between banks through mobile platforms. Developed by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI), UPI supports both peer-to-peer (P2P) and person-to-merchant (P2M) transactions.

As of mid-2024, UPI has demonstrated phenomenal growth. Transaction volumes surged to 78.97 billion in the first half of 2024, marking a 52% increase from the same period in 2023. The total transaction value reached ₹116.63 trillion, a 40% rise year-over-year. In July 2024 alone, the system processed 14.44 billion transactions, totaling ₹20.64 trillion in value, maintaining a daily transaction average of 465 million​

With over 300 banks participating, UPI now dominates both in-store and online payment markets, encompassing sectors like e-commerce, government services, and financial services. The platform’s widespread adoption has been bolstered by popular apps like PhonePe, Google Pay, and Paytm. Furthermore, the integration of voice command features, supporting English and Indian vernacular languages, is underway, promising enhanced accessibility​

UPI’s rapid adoption reflects its utility for micro and macro transactions, cementing its role as a transformative force in India’s digital economy.

Service

Unified Payments Interface is a real time payment system that allows sending or requesting money from one bank account to another. Any UPI client app may be used and multiple bank accounts may be linked to single app. Money can be sent or requested with the following methods:

• Mobile number: Send or request money from/to the bank account mapped using mobile number.
• Virtual Payment Address (VPA) or UPI ID: Send or request money from/to bank account mapped using VPA.
• Account number & IFSC: Send money to the bank account.
• QR Code: Send money by QR code which has enclosed VPA, Account number and IFSC or Mobile number.
• Aadhaar: Send money to the bank account mapped using Aadhaar number.

Requirement:

• Bank a/c
• Smart Phone with internet facility
• Mobile number should be linked with bank a/c
• Debit Card for re-setting MPIN.

Service Activation:

• Download the App for UPI
• Do registration online on the App with a/c details
• Create a virtual ID
• Set MPIN
• 5-7 minutes

What is required for Transaction?

• Smartphone with internet facility
• Registered device only
• Use registered MPIN
• Self Service Mode

Transaction Cost:

• Customer pays for data charges.
• NIL to customer by most Banks.

Blockchain is a decentralized digital ledger technology that records transactions across a distributed network of computers. It enables secure, transparent, and tamper-resistant record-keeping by grouping transactions into “blocks,” which are then linked in a chronological order to form a chain. Each block contains a list of transactions, and once data is entered into the blockchain, it becomes virtually immutable. This makes blockchain highly secure, as altering any single block would require changing all subsequent blocks, which is computationally infeasible without consensus from the majority of the network.

Blockchain technology gained prominence as the underlying structure for Bitcoin, the first decentralized cryptocurrency introduced by an anonymous individual or group of people under the pseudonym “Satoshi Nakamoto” in 2008. Nakamoto’s whitepaper, Bitcoin: A Peer-to-Peer Electronic Cash System, laid out the idea of a blockchain that would secure and verify transactions without the need for a central authority, such as a bank.

Since the inception of Bitcoin, blockchain has evolved beyond cryptocurrencies and is now being applied in various sectors, including supply chain management, voting systems, and healthcare, due to its ability to provide transparent, secure, and efficient solutions.

Uses of Block Chain:

• Cryptocurrency:

The most well-known use of blockchain is in cryptocurrency, particularly Bitcoin. Blockchain allows decentralized transactions, ensuring that users can transfer funds securely without the need for a central authority like a bank. Other cryptocurrencies, like Ethereum and Ripple, also use blockchain to facilitate peer-to-peer payments.

• Supply Chain Management:

Blockchain provides an immutable record of transactions, making it ideal for tracking goods throughout the supply chain. By recording each step of the supply chain process, from raw materials to finished products, blockchain ensures transparency, reduces fraud, and improves efficiency.

• Smart Contracts:

Smart contracts are self-executing contracts with the terms of the agreement directly written into lines of code. These contracts automatically execute and enforce the terms once predefined conditions are met. This application is commonly used on platforms like Ethereum to ensure secure transactions and agreements without intermediaries.

• Voting Systems:

Blockchain can be used to create tamper-proof electronic voting systems. By recording votes on a blockchain, the voting process becomes more transparent and secure, helping to reduce fraud and ensuring that each vote is counted accurately.

• Healthcare:

Blockchain can improve data management in healthcare by providing a secure, centralized database for patient records. It ensures that patient data is encrypted, accessible only to authorized users, and immutable, which enhances privacy and prevents data tampering.

• Identity Verification:

Blockchain can be used to create secure digital identities. These identities are encrypted and stored on a blockchain, allowing individuals to control their personal data and share it securely without relying on a centralized authority, thus reducing identity theft and fraud.

• Intellectual Property Protection:

Blockchain helps in protecting intellectual property by recording ownership and transactions related to creative works. Artists, musicians, and other creators can use blockchain to prove ownership of their work and ensure they receive royalties when their work is used or sold.

• Financial Services and Banking:

Blockchain enables faster, cheaper, and more secure cross-border payments by eliminating intermediaries. It can also streamline processes like loan disbursements, fraud detection, and regulatory compliance, enhancing efficiency within the financial sector.

Scope of Blockchain:

• User Control:

With decentralization, users now have control over their properties. They don’t have to rely on any third party to maintain their assets. All of them can do it simultaneously by themselves.

• Less Failure:

Everything in the blockchain is fully organized, and as it doesn’t depend on human calculations it’s highly fault-tolerant. So, accidental failures of this system are not a usual output.

• Less Prone to Breakdown:

As decentralized is one of the key features of blockchain technology, it can survive any malicious attack. This is because attacking the system is more expensive for hackers and not an easy solution. So, it’s less likely to breakdown.

• Zero Scams:

As the system runs on algorithms, there is no chance for people to scam you out of anything. No one can utilize blockchain for their personal gains.

• No Third-Party:

Decentralized nature of the technology makes it a system that doesn’t rely on third-party companies; No third-party, no added risk.

• Authentic Nature:

This nature of the system makes it a unique kind of system for every kind of person. And hackers will have a hard time cracking it.

• Transparency:

The decentralized nature of technology creates a transparent profile of every participant. Every change on the blockchain is viewable and makes it more concrete.