The Reserve Bank of India (RBI) plans to introduce a locally-operated cloud service for financial institutions in 2025, marking a bold move to challenge global tech giants like Amazon Web Services, Microsoft Azure, and Google Cloud. The pilot program, developed in collaboration with Indian IT firms, aims to offer affordable cloud storage tailored to smaller banking and financial services firms.
Key Highlights
- Local Initiative: The RBI’s initiative, a first for a global central bank, is part of its data localization drive, ensuring financial data remains within India’s borders.
- Market Dynamics: India’s cloud services market, valued at $8.3 billion in 2023, is expected to triple to $24.2 billion by 2028, according to IDC. The sector is currently dominated by foreign players.
- Phased Rollout: The program will begin small-scale implementation in the coming months and expand in phases, leveraging the expertise of private Indian IT firms.
Strategic Development
- RBI’s Research Arm: The Indian Financial Technology and Allied Services (IFTAS) is spearheading the development, with consultancy EY advising the project.
- Private Collaboration: Bids are open exclusively to Indian companies with experience in cloud technology. Data centers will be established in Mumbai and Hyderabad.
- Funding: Initial investment will come from the RBI’s asset development fund of ₹229.74 billion ($2.72 billion), with plans to invite financial firms to acquire equity in later stages.
Data Sovereignty Push
This initiative underscores the RBI’s commitment to data localization. By partnering with Indian IT firms, the RBI aims to reduce dependency on foreign providers, safeguard sensitive financial data, and support local enterprises.
