The Reserve Bank of India is considering setting up its cloud data storage platform in 2025, marking a significant step in India’s push for digital sovereignty. This initiative positions the RBI as one of the first central banks globally to venture into the cloud services domain.
India’s cloud services market, currently dominated by global giants such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and IBM Cloud, was valued at $8.3 billion in 2023. With projections to grow to $24.2 billion by 2028, the RBI’s entry into this space could disrupt the status quo.
The project is being led by the Indian Financial Technology and Allied Services (IFTAS), the RBI’s technology research arm, with consulting support from EY, reports Reuters. Aimed at fostering local talent and technology, the initiative bids exclusively from Indian companies or consortiums with proven experience in cloud solutions.
Under this initiative, participants must establish data centres in Mumbai and Hyderabad, reflecting India’s ongoing emphasis on data localisation. Reuters reports that the initial responses from Indian IT firms have been highly positive, with several expressing keen interest in partnering with the RBI.
The pilot will initially be funded through the RBI’s Asset Development Fund, valued at ₹229.74 billion ($2.72 billion). Over time, the central bank plans to invite financial institutions to hold equity, paving the way for a more inclusive ownership model.
What does this initiative mean for firms?
One of the main advantages for firms is reduced costs. Small financial firms will benefit from the RBI’s cost-effective initiative. Additionally, the data centres will be located in India, addressing concerns about financial data security.
Furthermore, by establishing a cloud service, India wants a share of the cloud industry, which is expected to be worth billions of dollars.
The initiative can also boost employment opportunities for the country reeling under massive unemployment woes.
Developing countries like India heavily depend on American big tech companies for cloud services. This dependence provides these companies with more influence than is ideal. The initiative aims to reduce India’s reliance on Western firms, safeguarding Indian financial institutions from external disruptions.
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