The study explores the transformative impact of blockchain technology on corporate governance practices in Indian commercial banks. With the rapid evolution of financial systems, blockchain emerges as a pivotal tool for enhancing transparency, security, and accountability. By leveraging decentralized ledgers and real-time data sharing, blockchain can mitigate risks, improve decision-making, and streamline governance frameworks. The study adopts an exploratory approach to examine how blockchain adoption reshapes traditional governance structures, addressing challenges such as fraud, data manipulation, and inefficient processes. Findings highlight blockchain’s potential to enhance stakeholder trust, regulatory compliance, and operational efficiency. The study recommends a strategic roadmap for Indian banks to integrate blockchain, fostering robust governance and sustainable financial performance.

The primary objective of the study to evaluate the effectiveness of corporate governance effectiveness with the application of blockchain technology in banking sector. In this broader framework, the following are the specific objectives of the study: 

1. To explore the technological innovation in the banking sector.
2. To study the relationship between fraud detection with the introduction of blockchain technology in the Indian banking sector.
3. To identify the areas where there is scope for improvement and offer suggestions which are based on findings of the study.

(2023) Hashem, R. E. E. D. R., Mubarak, A. R. I., & Abu-Musa, A. A. E. S. entitled “The impact of blockchain technology on audit process quality: An empirical study on the banking sector.” The study aims to evaluate the relationship between blockchain and audit process quality of Egyptian banking sector. The empirical study also found a strong correlation between blockchain technology and audit process quality of the banking sector. The findings highlight the necessity for the creation of new audit standards and a set of laws that are clear and consistent so that auditors can integrate technology and improve audit procedures.

(2023) Sachitra, V., & Dayaratna, D. entitled “Examine the Feasibility of Implementing Blockchain Technology in the Sri Lankan Banking System”. The study revealed that Blockchain technology is viable to use for shared KYC, trade finance, and Central Bank Digital Currency (CBDC). The most pressing issues in using Blockchain technology were interoperability issues, governmental restrictions, and ignorance. The existence of Fin Tech firms, the regulator's mindset, the collaboration of banks, consumers' attitudes, and the competence of the financial system also served as catalysts for such an adoption.

(2022) Eghe-Ikhurhe, G. O., & Bonsu-Assibey, M. O. entitled “The effects of blockchain technology on corporate governance: Evidence from emerging economy.” The findings of the study witnessed that blockchain technology has a favourable influence on corporate governance, implying the elimination of agents as middlemen in corporate governance via code and peer networking. The adoption of blockchain technology is seen to have the potency to strengthen regulatory processes, improve transparency, enable the identification and avoidance of data manipulation, and provides a stronger foundation for good corporate governance.

(2021) Khalil, M., Khawaja, K. F., & Sarfraz, M. entitled “The adoption of blockchain technology in the financial sector during the era of fourth industrial revolution: A moderated mediated model”. The findings show that digital business strategy is favourably associated to business process innovation and company financial performance. Blockchain adoption mediates the interaction between digital company strategy, business process innovation, and financial performance. Information technology alignment serves as a bridge between Blockchain adoption and process innovation.

(2021) Kabir, M. R., & Islam, M. A. The paper entitled “Behavioural intention to adopt blockchain technology in Bangladeshi banking companies” The study attempts to understand the variables influencing the banking industry's desire to adopt blockchain. The study find that two internal characteristics named perceived utility and ease of use are determined to be crucial in characterising the intention to embrace blockchain. However, two additional external factors, social influence and trust are examined. Trust is determined to be important, although social influence is not statistically significant.

(2020) Kulkarni, M., & Patil, K. entitled “Block Chain Technology Adoption for Banking Services-Model based on Technology-Organization-Environment theory.” The study viewed that Blockchain technology can enable novel business solutions by allowing asset tracking, data storage in append-only databases, consensus based on distributed ledger systems, cross-border payments and remittances, and digital identification. Understanding BCT adoption in Indian banks is critical to function as a practical solution for banking and financial services. It is determined that perceived compatibility, perceived cost, relative benefit, perceived security, learning culture, top management, competitive pressure, government policies, and customer preparedness are major factors influencing BCT adoption in banking services.

RESEARCH GAP

After getting through numerous study there is considerable scope for the present study. Thus, it is evident from the above literature that the previous research provides modest insights on the corporate governance effectiveness with the introduction of blockchain technology. In fact, the fast developing and unpredictable character of technology breakthroughs is perceived to clash with more traditional methods to governance that are largely hierarchical, i.e., top-down and less self-regulated So far, research efforts appear to have focused on the creation and management of disruptive technologies, with little attention made to the design and efficacy of existing corporate governance and accounting procedures. Further no study has been witnessed the corporate governance effectiveness with the introduction of blockchain in Indian banking sector which was a new concept for Indian economy.

Research Design: The study is exploratory in nature. The five-point scale applied in this study was further categorized into three categories: high, moderate, and low scales. Scores more than 3.67 is viewed as high; scores less than 2.33 is viewed as low; while those between low and high scores are considered moderate (Sassenberg et al.,2009). Once the development of the questionnaire lists, the questions were assessed, sorted, coded, and the responses were entered into the statistical software for social sciences (SPSS). Results of the statistical analysis will be presented in the research according to a subset of the questionnaire list questions.

Data Collection: The study relies on obtaining preliminary data from the study sample via the questionnaire list method, whether distributed via electronic accounts distributed via the internet or through personal interviews, in order to identify the study sample’s opinions and trends on the extent to which the digital transformation towards the application of blockchain technology in the Indian banking industry contributes to improving the effectiveness of corporate governance.The field study community includes research scholar, financial managers, accounting professional and financial analyst.

Sampling Technique: The judgemental sampling techniques have been employed in the present study.

The study employed the arithmetic mean, standard deviation and cronbach alpha.

With the objective to ensure that the research sample is as representative of the community as possible, the field study population has been split into three distinct groups, with each group given a relative weight. Therefore, the various groups received a total of 200 questionnaire lists. The Table 1 summarises the total count of questionnaire has been distributed and total count of correct questionnaire has been used for the purpose of study.

The Table No. 2 represents that majority of the respondent were male 54.37% while female represents the 45.62%. The above Table also explains that majority of the respondent were age between 31-40. The Table No. 2 depict that the majority of the educational qualification of the respondent comprises Master degree (50.62%) while Ph.D degree comprises 46.25% and graduation degree hold by respondent 0.031%. Thus, it was concluded that the respondent has the sufficient knowledge in relation to the purpose of study.

The Table 3. summarizes the descriptive statistics of the questionnaire list’s replies to the questions about the effectiveness of corporate governance with the adoption of blockchain technology in the Indian banking sector. It is observed from the above-mentioned Table that the value of the weighted averages for the answers to corporate governance effectiveness questions ranged between 3.20 and 4.82. This suggests that the sample categories generally agree that the adoption of blockchain technology will be improve the corporate governance practices of the Indian commercial bank.

Testing Of Hypothesis

H0: There is no significant association between corporate governance effectiveness and blockchain technology.

H1: There is a significant association between corporate governance effectiveness and blockchain technology

To test the main hypothesis, a Test (T) of a single sample relied on the One Sample T-Test and explains. The following table shows the results of the Test (T) for the hypothesis:

Table 4: Result of one sample t-test

The Table No. 4 depicted the one sample t-test to statistically analyse that blockchain technology adoption will improve the corporate governance in the Indian banking industry. It is observed from the Table No.2 that mean value in relation to responses from targeted sample survey is recorded at 4.5680 which indicated that majority of sample categories are satisfied that blockchain technology will improve the corporate governance practises of the Indian banking industry. On the other hand, the above-mentioned table also discloses that t-value and arrived at -589.19 while p-value is recorded at 0.000 which indicates that there is strong evidence to reject null hypothesis and accept alternate hypothesis. Thus, it is found that the adoption of blockchain technology will improve the corporate governance practises of the Indian Bank Industry.

For testing the sub hypothesis, the simple linear regression has been used to find the association between adoption of blockchain technology and fraud detection at an early stage.

H01.1: There is no significant association between adoption of blockchain technology and fraud detection at an early stage.

H11.1: There is a significant association between adoption of blockchain technology and fraud detection at an early stage.

Table No.5: Linear Regression Model Summary^b

Table No.6: Results of ANOVA^b

Source: Outputs of the Statistical Program Package for Social Sciences (SPSS)

Table No.7: Linear Regression Coefficient^a

Source: Outputs of the Statistical Program Package for Social Sciences (SPSS)

The model summary above shows the extent at which the Blockchain technology will detect the fraudulent practises at early stage. The coefficient of determination (R² =0.986) shows that 98.5% accounted for detection of fraudulent practises with the integration of blockchain in the banking operations. This result is statistically significant because the p-value of the result (0.000) is less than 0.5 level of significance used for this study. This indicates that blockchain technology will help to detect fraudulent practises at early stage and bank further take effective measure to safeguard the fraud scam.

The ANOVA value F of (3.52) while the calculated F value is (7.472), at the degree of freedom of 73 shows that blockchain technology has a positive and significant impact on detection of fraudulent practises since the F calculated value is greater than the F table value.

The model further signifies that for an adoption of the blockchain technology into banking practice, detection of fraud at an early stage is certain. This means that even when cybercriminals are hacking bank accounts to swindle funds fraudulently, they can’t break into blockchain database without bank’s prior consent through the development of complex security system. The efficient rate of detection of fraud at an early stage will be increased by 0.351. Therefore, the null hypothesis is rejected while the alternative hypothesis was accepted.

The integration of blockchain technology in banking operations has been identified as an important milestone in the digital transformation of banking operations, with the expectation to make banking operations more financially viable and robust. The research investigates how blockchain can enhance corporate governance in the banking industry. This study discloses the core characteristics of blockchain that may be implemented by bank management to scale up corporate governance. As a result, this research broadens the scope of identifying methods that would improve corporate governance, such as record openness, early identification of fraud scams, and lessening the risk of profit management and accounting manipulation in the banking industry. As a result, banks that have identified which areas of their shortcomings may be addressed by blockchain must invest in this technology in order to strengthen client loyalty. Thus, it is concluded that blockchain technology should be adopted by banks for improving the practises of corporate governance and to exterminate financial scams held which made a bank has to bear heavy losses.

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