Indian central bank to take on global IT giants – media
India’s central bank is reportedly preparing to launch its own cloud services by 2025 in an effort to bolster the country’s digital infrastructure and protect financial data, Reuters has reported, citing unnamed sources.
The Reserve Bank of India (RBI) initiative comes amid growing concerns over data privacy and the influence of global IT giants, which have long dominated the cloud services market.
In a move to counter the dominance of major global technology firms in the financial sector, the cloud platform will use solutions developed by domestic IT firms, providing alternatives to Amazon Web Services, Microsoft Azure, Google Cloud and IBM Cloud and others, the report noted. It termed the project a “first-of-its-kind initiative” from a major global central bank. By developing its own cloud services, the regulator hopes to reduce dependence on foreign technology providers, and foster greater control over critical financial infrastructure.
The International Data Corporation has said India’s cloud services market is Asia’s third largest, valued at $8.3 billion in 2023, and expected to reach $24.2 billion by 2028. However, the sector is largely dominated by foreign firms, the Times of India noted in a report. The UK-headquartered consultancy firm EY has been appointed as an advisor to the central bank project.
The plans to set up public cloud infrastructure for the financial services industry were initially announced by RBI governor Shaktikanta Das in December last year. Das highlighted the growing data volumes managed by financial institutions, noting the increasing adoption of cloud infrastructure for data management.
“This initiative aims to bolster data security, maintain data integrity and privacy. Moreover, it is anticipated to offer improved scalability and ensure business continuity,” the central bank chief said at the time.
According to officials who spoke to Reuters, the platform will be tested on a smaller scale within the coming months, and then will be expanded in phases over the next few years. They added that the needs of smaller banking and financial services firms will also be kept in mind, as current solutions offered by international companies are often not affordable for such players.
RBI has only invited companies incorporated in India with prior experience of building cloud-related solutions to bid for the project, the report noted, emphasising the central bank’s push for localisation of digital infrastructure for payments, storing and processing of the financial data. The project will initially be funded by the central bank’s asset development fund to the tune of $2.7 billion, the report noted, and at a later stage financial firms will be invited to hold equity.
RBI’s plans align with the Indian government’s broader objectives, outlined in its Digital India initiative, which aims to transform the country into a digitally empowered society and knowledge economy as New Delhi seeks to foster innovation and create jobs while ensuring that digital infrastructure remains secure and under national control.
