RBI to Launch Local Cloud Services in 2025, Challenging Global Giants

Key Highlights:

• The Reserve Bank of India (RBI) plans to launch a cloud data storage service in 2025 for financial firms in India.
• This initiative aims to compete with global giants like Amazon Web Services and Microsoft Azure by using local IT companies.
• The cloud platform will help smaller financial firms access affordable data storage options and support the growth of India’s cloud services market.

In an ambitious move to strengthen India's digital economy, the Reserve Bank of India (RBI) is set to roll out a pilot cloud service in 2025 aimed at providing local cloud data storage solutions for the country's financial sector. This initiative, which will use local IT companies, seeks to provide an affordable alternative to global cloud giants like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.

A Growing Market for Cloud Services in India

The cloud services market in India is rapidly expanding. In 2023, it was valued at $8.3 billion, and experts predict it could grow to $24.2 billion by 2028. Despite this growth, most of the market is dominated by foreign companies. The RBI's move to introduce local cloud solutions is seen as a strategic step to create competition and promote data localization, an important part of India's digital policy.

Details of the RBI's Cloud Project

The cloud service pilot will be targeted at smaller financial institutions that find it difficult to afford services from big international providers. The RBI has emphasized that this initiative will be affordable, aiming to help financial firms with their data storage needs without the high costs often associated with foreign cloud platforms.

The cloud platform will be built in phases, starting small and expanding gradually. Initial work will be handled by the Indian Financial Technology and Allied Services (IFTAS), which is part of the RBI's research wing. The RBI has also brought in EY as an advisor for the project. The platform will be designed and developed in collaboration with one or more private tech firms that specialize in cloud services.

Supporting India's Digital Sovereignty

The project aligns with the RBI's push for data localization, which aims to keep financial data within India’s borders. In line with this vision, the RBI is only inviting Indian companies with prior experience in cloud services to bid for the project. These companies will need to set up data centers in key locations like Mumbai and Hyderabad to ensure smooth operations across the country.

The pilot project will be funded by the RBI’s asset development fund, which is valued at ₹2.72 billion. Over time, the RBI plans to invite financial firms to take equity stakes in the cloud platform.