How Quickly is Mumbai’s Financial Sector Picking Up Blockchain-based KYC Solutions in Preventing Identity Fraud?

Mumbai’s fast-growing financial sector faces escalating identity fraud due to the inefficiency and security vulnerabilities of traditional, siloed Know Your Customer (KYC) processes. This paper evaluates the potential of a DLT/Blockchain-based shared KYC utility to deliver a highly secure, immutable, and cross-institutional identity verification system, which has been pilot-tested by consortia like BankChain. Crucially, it resolves the conflict between the DLT’s immutability and India’s Right to Erasure (DPDP Act, 2023) by proposing architectures like Off-Chain Hashing, and highlights the necessary synergy with Machine Learning for real-time, continuous fraud monitoring. The ultimate conclusion is that transitioning from isolated pilots to an RBI-mandated, regulated Compliance Digital Public Infrastructure is an urgent strategic necessity for securing Mumbai’s financial ecosystem and maintaining its competitiveness.