Mumbai: The Reserve Bank of India (RBI) will offer a cloud facility for banks
and financial institutions to help enhance data security, privacy and business continuity. The RBI also announced plans to set up a Fintech Repository.
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. It is also expected to facilitate scalability and business continuity,” said the RBI.
“This would qualify as yet another instance of digital public infrastructure,” T Rabi Shankar, deputy governor at the RBI, said during the monetary policy press conference. “Especially for smaller entities, cooperative banks and those things, this provides a lot of efficiency in terms of scale, because for each one to maintain their database could involve a large amount of investment, skill and all that which this cloud is expected to provide,” Sankar added.
The cloud facility will be set up and initially operated by 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. This cloud facility is intended to be rolled out in a calibrated fashion in the medium term.
Sanjay Gupta, Partner, consulting, Deloitte India said, “While banks and financial institutions acknowledge the benefits of cloud technology in their digital transformation journey, concerns related to cybersecurity, data localization, and cost transparency have been primary inhibitors. The RBI's cloud initiative is expected to address these issues comprehensively. With this announcement, it is
anticipated that banks and financial institutions will now prioritize the development of a cloud operating model within their IT setup."
