Analysis: This article focuses on the massive technology infrastructure that India is building to support its financial services sector. This includes an ERP platform for rural microfinance institutions, a common platform for agriculture and rural development banks, and cloud computing facilities across the financial sector. These initiatives reflect India's efforts to drive digitalization and efficiency, while also demonstrating India's potential in the fintech sector. Therefore, the headline "China needs to be wary of India" grabs the reader's attention and highlights that China should pay attention to India's developments in the fintech sector.
India is building a massive technology infrastructure to support its financial services sector. More than 60,000 rural microfinance institutions have signed up to a nationwide ERP platform to manage their affairs, according to an announcement on Tuesday. The lenders are primary agricultural cooperative credit cooperatives (PACS) – community-owned financial institutions that lend primarily to rural and agricultural borrowers. There are about 100,000 such organizations in India.
In 2022, India** launched a program to digitize them in hopes of improving efficiency and oversight. Yesterday's announcement revealed that 62,318 PACs have registered for a shared ERP, developed by the National Bank for Agriculture and Rural Development (NABARD), and 5,673 such organizations have been trialled so far. The ERP will manage loans, procurement, and even human resources, while also providing customer-facing tools. Hardware procurement for the mega system has begun.
The project has a budget of about $300 million (about 25.).Rs 160 crore). Another mega-project announced last week will develop a common platform for 1,851 agriculture and rural development banks (ARDBs). Branch and back office departments will adopt a common platform – again developed by Nabard – and digitize and integrate legacy data. The budget for this work is around $14 million (Rs 119.4 billion).
The third project, announced by the Reserve Bank of India on December 8, revealed work to build a cloud computing facility for India's entire financial sector. After noting that India's "banks and financial entities are maintaining ever-increasing volumes of data" and often resorting to public and private cloud facilities, the Reserve Bank of India (RBI) has proposed its own cloud and claims that it will "enhance the security, integrity, and privacy of data in the financial sector."
This is also expected to promote scalability and business continuity," the central bank said. The Register requested the Reserve Bank to elaborate on its efforts, but did not receive a response.
However, the RBI does have a plan: it intends to have its wholly-owned subsidiary, the Indian Fintech & United Services Corporation (IFTAS), build and operate the cloud. "Eventually, the cloud facility will be transferred to a separate entity owned by financial sector participants," the Reserve Bank announcement said, adding that it will be rolled out "in a calibrated manner in the medium term".
India** also plans to build a substantial AI infrastructure to help the public and private sectors get the GPUs they need. India is not currently able to provide such accelerators, and the country's semiconductor industry is still in its infancy. But companies such as Dell and Lenovo have agreed to make the kit in India, as have Hewlett-Packard Enterprise. Therefore, it is likely that the infrastructure planned by India's financial sector is made locally.