The Indian banking system is a complex hierarchical structure engaged in financial intermediation. In its role as a financial intermediary, it performs several transactions like cash deposits, cash withdrawals and investments on a daily basis and is an important institution to assess a nation’s economic growth. However, with the constantly growing amount of data and the increasing susceptibility of banks to online fraud, banks now need to shift to a more robust, efficient and secure platform to carry out their functions. One such platform is provided by the blockchain structure. Blockchain is a decentralized, public ledger system which has gained immense popularity and recognition for its efficiency, security and transparency since its inception in 2008. This paper aims to make required changes in the blockchain model prevalent today to make it relevant for use in the banking system and evaluates the advantages of the blockchain system over the current system employed in consortium banking and payments through an assessment framework. This paper also tries to devise types of blockchain platforms which can encompass most of the functionalities of the banking system existing today. The paper is divided into three parts. The first part aims to devise a suitable consensus protocol which can be used to make blockchain suitable for banks, the second part discusses types of blockchain platforms applicable in the banking sector and the third part employs use cases in payments and consortium banking to demonstrate the advantages of blockchain. © 2021, Springer Nature Singapore Pte Ltd.