The Reserve Bank of India (RBI) plans to launch a pilot programme in 2025 to provide affordable local Cloud data storage for financial firms, two sources familiar with the matter told news agency Reuters. The initiative, which has not been officially announced, marks a pioneering move for a major global central bank.
RBI's Foray into the Cloud Market
The RBI's cloud platform will collaborate with Indian IT firms, creating competition for global giants like Amazon Web Services, Microsoft Azure, Google Cloud, and IBM Cloud. This effort aims to address the high costs of existing Cloud solutions for smaller banking and financial services firms.
Asia's third-largest economy has a booming Cloud services market, valued at $8.3 billion in 2023, with projections to reach $24.2 billion by 2028, according to the International Data Corporation. However, the market is largely dominated by foreign players.
Pilot Programme and Expansion
"We want to start implementing on a smaller scale in the next few months," said one source, a senior executive involved in the project. The pilot will expand in phases over the next few years, focusing on creating cost-effective solutions tailored for smaller financial institutions.
The initiative follows RBI Governor Shaktikanta Das’s announcement in December 2022 about plans to establish a public cloud for the financial sector.
Project Details and Partners
Initial development is being spearheaded by the Indian Financial Technology and Allied Services (IFTAS), the RBI's research wing. The project will later involve partnerships with private-sector technology firms. Consulting firm EY has been appointed as an advisor, and the central bank’s asset development fund, valued at Rs 229.74 billion ($2.72 billion), will finance the initial stages.
The RBI also plans to invite financial firms to hold equity in the project at a later phase, though the final cost of the initiative remains unclear.
Push for Data Localisation
This cloud platform is part of the RBI's broader efforts to localise payments and financial data. The bank has restricted participation to Indian companies or consortia with prior expertise in cloud solutions. Applicants must set up data centers in Mumbai and Hyderabad, according to a procurement document published on IFTAS's website in October.
Strong Interest from Private Players
The project has already attracted significant interest from Indian IT and cloud service providers. "We have a humongous amount of interest from private players wanting to partner," one source noted. The RBI declined to comment on the project when contacted by Reuters.