The Reserve Bank of India’s monetary policy committee raised the key lending rate or the repo rate to 5.40%.
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India’s central bank will launch a pilot program in 2025 offering local cloud data storage to financial firms at affordable prices, according to two sources aware of the matter, who declined to be identified as conversations are confidential.
The Reserve Bank of India’s planned cloud platform will use local IT firms, pitting it against the likes of Amazon Web Services, Microsoft Azure, Google Cloud and IBM Cloud, in a first-of-its-kind initiative from a major global central bank.
The burgeoning cloud services market in Asia’s third largest economy was estimated at $8.3 billion in 2023 and is expected to grow to $24.2 billion by 2028, according to a report, opens new tab by International Data Corporation, but it is largely dominated by foreign firms.
“We want to start implementing on a smaller scale in the next few months,” said one of the two sources, a senior executive working on the project.
The pilot will be expanded in phases over the next few years, the source said, adding the cloud service will be built keeping in mind the needs of smaller banking and financial services firms who find existing offerings unaffordable.
In December last year, RBI governor Shaktikanta Das announced plans to set up a public cloud for the financial services industry.
Details of the project have not been previously reported. The RBI did not respond to an email from Reuters seeking details of the project.
Initial work on the cloud is being driven by the research wing of the central bank called the Indian Financial Technology and Allied Services. It will then be developed further in partnership with one or more private sector technology firms, according to the sources.
Consultancy firm EY has been appointed as an advisor to the project.
The project will initially be funded by the central bank’s asset development fund of 229.74 billion Indian rupees ($2.72 billion), the second source said, adding that at a later stage the central bank will invite financial firms to hold equity.
Reuters could not determine the estimated final cost of the project.
Data localization imperative
Setting up a cloud service built in partnership with local IT firms is a further step in the central bank’s push for localization of payments and financial data.
The RBI has invited only companies incorporated in India with prior experience of building cloud-related solutions to bid for the project, as per a procurement document published on IFTAS website in October.
Companies can apply by themselves or as part of a consortium and would be required to set up data centre facilities in Mumbai and Hyderabad.
“We have a humongous amount of interest (from private players who want to partner). A significant number of IT companies as well as Indian cloud services companies have expressed their interest,” the source added.