Mumbai, Dec 9 (KNN) The Reserve Bank of India (RBI) is working on setting up a cloud facility for India’s financial sector to enhance its security, integrity and privacy.

The service, which will be developed by a subsidiary of the central bank, will directly compete with similar services offered by American companies like Amazon, Google and Microsoft.

The central bank is taking the similar approach as it has done with setting up ‘digital public infrastructure’ (DPI).

There the underlying technology is built by the government, and is later outsourced to the private sector for developing various applications. 

The biometric identity programme Aadhaar and United Payments Interface (UPI) are key examples of DPI.

“Banks and financial entities are maintaining an ever-increasing volume of data. Many of them are utilising various public and private cloud facilities for this purpose. The Reserve Bank is working on establishing a cloud facility for the financial sector in India. The proposed facility would enhance the security, integrity and privacy of financial sector data,” RBI said in its statement on developmental and regulatory policies.

The facility will be set up and initially operated by the Indian Financial Technology & Allied Services (IFTAS), a wholly-owned subsidiary of RBI. 

Eventually, the cloud facility will be transferred to a separate entity owned by the financial sector participants, the central bank said. The service is intended to be rolled out in a calibrated fashion in the medium term.

While details about the cloud service, especially around its adoption, are yet to be released, the fintech industry is looking forward to whether the central bank would require companies to switch to its cloud offering. 

The regulator already has an exhaustive set of norms of localisation of data, and many in the industry believe that the cloud service could take those norms a step further.

(KNN Bureau)