The Reserve Bank of India (RBI) plans to launch a pilot initiative in 2025 to offer cost-effective and secure cloud storage options for financial institutions throughout India. This initiative is viewed as a strategic move to counter the influence of international cloud service providers such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and IBM Cloud, by providing a local alternative for smaller financial institutions.
India’s cloud services market is rapidly growing, and the RBI’s move to develop a local cloud platform is expected to have a significant impact on the industry. As per market reports, India’s cloud services sector is presently worth $8.3 billion and is projected to grow to $19.2 billion by 2028. With a large portion of this market controlled by international companies, the RBI aims to change the landscape by offering cost-effective and secure cloud solutions tailored to the needs of smaller financial firms.
The RBI’s new initiative is designed to support smaller banks, financial institutions, and fintech companies by providing them with affordable cloud services. Currently, many of these companies rely on global providers, which can be expensive and may raise concerns about data privacy and security. The RBI’s cloud storage platform will allow Indian financial institutions to store sensitive data within the country’s borders, ensuring compliance with India’s data localization regulations and enhancing data sovereignty.
The RBI’s cloud storage solution will be created and managed in partnership with domestic IT companies. Indian Financial Technology and Allied Services (IFTAS) will play a key role in leading the development of the platform, working alongside private tech companies. The central bank is also in discussions with consultancy firm EY to provide advisory services for the project.
The initial funding for the project will come from the RBI’s asset development fund, which amounts to ₹229.74 billion (around $2.72 billion). The funding will help kickstart the project, and over time, financial institutions will be given the opportunity to invest in the platform and acquire equity in the cloud service.
The pilot program, which is expected to begin in 2025, will be rolled out in phases, with a focus on smaller financial institutions. The goal is to gradually expand the platform to meet the growing needs of India’s banking and financial services sector.
The RBI’s cloud storage initiative is a major step toward improving the digital infrastructure of India’s financial sector and reducing the country’s dependence on foreign cloud providers. By offering affordable, secure, and locally hosted cloud services, the RBI aims to empower smaller financial institutions and ensure that India’s data remains within the country’s borders. If successful, this initiative could have far-reaching implications for the financial technology sector, marking a new era of digital sovereignty for India.
