RBI to take on Microsoft, Google with affordable cloud platform

By Gloria Methri

In a landmark move, India’s central bank is set to launch its first-ever local cloud storage service for financial firms by 2025. The initiative aims to provide cost-effective, secure, and localised cloud solutions, challenging the dominance of global giants like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud in India’s burgeoning cloud market.

This pilot project by the Reserve Bank of India (RBI) marks a pivotal step in strengthening India’s financial ecosystem, supporting smaller financial institutions, and safeguarding the country’s data sovereignty.

Key Features of the RBI Cloud Initiative

Affordable Solutions for Financial Firms: The platform will cater primarily to smaller financial firms that often find international cloud services expensive and less accessible.

Promoting Local Collaboration: The RBI is partnering with Indian IT firms to design, develop, and manage the cloud infrastructure, ensuring localized innovation.

Data Sovereignty at the Core: The project aligns with India’s ongoing efforts to maintain critical financial and payment data within its borders and comply with regulatory requirements.

Market Opportunity: India’s cloud market, valued at $8.3 billion in 2023, is projected to triple to $24.2 billion by 2028, creating a fertile environment for indigenous cloud solutions.

The Pilot Program Details

The initiative will begin as a pilot program led by Indian Financial Technology and Allied Services (IFTAS), a subsidiary of the RBI. The project will be funded through the RBI’s asset development fund, which stands at ₹229.74 billion ($2.72 billion).

The initial phase will focus on smaller-scale deployment before scaling up to serve a larger number of financial institutions nationwide. To ensure compliance with India’s strict data regulations, the platform’s data centres will be in Mumbai and Hyderabad.

In a bid to promote local expertise, only Indian companies with significant experience in cloud technology will be eligible to bid for the project.

Strategic Implications

Reducing Dependency on Global Providers: The RBI’s move directly challenges the monopoly of global cloud leaders, creating more competitive options for India’s financial sector.

Empowering Smaller Firms: By offering affordable and tailored solutions, the RBI is empowering smaller financial firms to adopt advanced technology without prohibitive costs.

Boosting the Local Tech Ecosystem: The collaboration with Indian IT firms is expected to stimulate innovation, create jobs, and strengthen India’s position as a global technology hub.

The RBI’s local cloud initiative aligns with the government’s broader vision of fostering a self-reliant tech ecosystem and ensuring robust data security. As the financial sector becomes increasingly digitalized, the demand for secure, affordable, and reliable cloud services will only grow. With a launch set for 2025, the initiative is poised to revolutionise the financial sector’s access to cloud technology, paving the way for a more resilient and self-reliant digital economy.