India’s central bank to establish cloud facility for financial institutions

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India’s central bank to establish cloud facility for financial institutions
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  • The Reserve Bank of India has announced that it is working on a dedicated cloud facility.
  • The cloud facility is being developed for the country’s financial sector.
  • The new facility is aimed at enhancing data security and privacy.
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India’s central bank, the Reserve Bank of India (RBI) is working on a dedicated cloud facility for the booming financial sector in India. This was announced by RBI governor Shaktikanta Das during the central bank’s Monetary Policy Committee (MPC) announcement.

The cloud facility is aimed at enhancing data security and privacy. It will also offer better scalability and ensure business continuity for companies.

"Banks and financial entities are maintaining an ever-increasing volume of data. Many of them are utilising the cloud facilities for this purpose. The Reserve Bank is working on establishing a cloud facility for the financial sector in India for this purpose,” said Das.

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Its purpose is to help smaller entities build efficiencies in terms of scale, explained Rabi Sankar, deputy governor of RBI at the post-monetary policy press conference.

The cloud facility will be set up in a phased manner in the medium term. It will be initially operated by Indian Financial Technology & Allied Services (IFTAS), which is a wholly-owned subsidiary of the RBI.

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The facility will later be transferred to a different entity, owned by companies from the country’s financial sector.

There is a growing need for improved data security as there has been a steady increase in digital transactions in the country. The setting up of this cloud facility will help startups and small enterprises handle data efficiently, probably at a reduced cost compared to existing international options available.

RBI MPC has decided to keep key rates unchanged at 6.5% in its December policy. Other announcements from the meet include enhancements to limits for specific categories of transactions for Unified Payments Interface (UPI).

As per the new UPI transaction limits, individuals can now make payments up to ₹5 lakh per day to hospitals and educational institutions by UPI. This was earlier capped at ₹1 lakh.

The central bank has also proposed to increase the e-mandate for recurring payments to ₹1 lakh from current ₹15,000.

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