Reserve Bank of India
Reserve Bank of India

According to Reuters, the Reserve Bank of India (RBI) plans to establish a pilot initiative in 2025 to provide affordable local cloud storage solutions for financial enterprises. This program aims to challenge the dominance of multinational cloud service providers like Amazon Web Services, Microsoft Azure, Google Cloud, and IBM Cloud. The action, confirmed by sources familiar with the situation, will remain discreet as conversations continue.

This is a big global move for a central bank, as the RBI intends to work with local IT firms to construct the platform. The idea is to provide smaller financial organizations with cost-effective alternatives to conventional cloud services.

According to International Data Corporation, India’s cloud services market would rise to $24.2 billion by 2028 from $8.3 billion today. Currently dominated by multinational corporations, the RBI’s project is consistent with efforts to localize payments and financial data, guaranteeing compliance with India’s data sovereignty rules.

“We plan to start implementing on a smaller scale in the coming months,” said a senior official involved in the initiative. The pilot initiative will eventually extend to meet the needs of smaller banking and financial services organizations.

The RBI’s public cloud service ambitions were initially unveiled in December 2022. Indian Financial Technology and Allied Services (IFTAS) is leading the first development in partnership with private tech companies, and consulting company EY has been appointed.

The central bank’s asset development fund, totaling ₹229.74 billion ($2.72 billion), will fund the initial phases. Financial institutions will eventually be invited to invest and own stock in the cloud service.

According to an October procurement document posted on the IFTAS website, only Indian-registered enterprises with cloud technology experience are eligible to compete on the project. These participants must set up data centers in Mumbai and Hyderabad.

“We’ve seen substantial enthusiasm from IT and Indian public service companies eager for cooperation on this project,” the report stated, citing a source. This plan comes at a critical time for India’s banking and technology sectors, as it seeks to strike a balance between innovation and local control over critical infrastructure.