The Reserve Bank of India (RBI) will set up a cloud facility for the financial sector in India to secure financial sector data and help with scalability and business continuity, the central bank announced on Friday.
The Indian Financial Technology and Allied Services (IFTAS), a wholly-owned subsidiary of the RBI, will set up and operate the cloud facility initially and it will later be transferred to a separate entity owned by the financial sector participants, said the bank.
The RBI will also operationalise a fintech repository by the Reserve Bank Innovation Hub by April 2024 that would have information about their activities, products, technology stack, financial information etc.
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However, providing information for this repository would be voluntary for fintech companies. Information from this repository will be used for policy-making, RBI said.
Cloud as DPI
RBI deputy governor T Rabi Shankar said that the idea to set up a public cloud was not prompted by data sovereignty concerns but to help with efficiency, especially for smaller entities and cooperative banks.
“This provides a lot of efficiency in terms of scale because for each one to make their own database involves a large amount of investment and skill, which this cloud is expected to provide. ... At this point, our idea is to just give it a push and let it start off and then let the system manage,” Shankar said.
{{/usCountry}}“This provides a lot of efficiency in terms of scale because for each one to make their own database involves a large amount of investment and skill, which this cloud is expected to provide. ... At this point, our idea is to just give it a push and let it start off and then let the system manage,” Shankar said.
{{/usCountry}}The deputy governor did not clarify if this new entity owned by the financial sector would function like the National Payments Corporation of India (NPCI), which controls the UPI ecosystem.
At this stage, it is also not known what the composition of the new controlling entity would be and how equitable representation of smaller entities would be ensured.
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The RBI also announced that it would issue a draft circular for public comments on a regulatory framework for connected lending for all regulated entities. It also said that web aggregators of loan products (WALP) will be regulated by a “comprehensive regulatory framework” that focuses on “enhancing the transparency in the operations of WALPs, increasing customer centricity and enabling the borrowers to make informed choices”. The guidelines will be issued separately.
Meanwhile, the RBI has also increased the UPI transaction limit for payments made to hospitals and educational institutions from ₹1 lakh to ₹5 lakh.
For e-mandates for subscription to mutual funds, payment of insurance premiums and payments of credit card bills, transactions up to ₹1 lakh will not require an additional factor of authentication. The limit is currently set at ₹15,000.