India builds massive tech infrastructure to support finance sector

ERP for 63,000 small rural lenders, software for 1,800 banks, and better-than-hyperscale cloud for the rest

India is building massive technology infrastructure to support its financial services sector.

A Tuesday announcement revealed that over 60,000 small rural lenders have signed up to join a national ERP platform to run their affairs.

The lenders are all Primary Agriculture Cooperative Credit Societies (PACS) – community-owned financial institutions that make loans, mostly to rural and agricultural borrowers. India is home to around 100,000 such organizations. In 2022 the nation's government commenced a program to have them digitize, in hopes of improving efficiency and oversight.

Yesterday's announcement revealed that effort has seen 62,318 PACS sign up for the shared ERP, which has been developed by the National Bank for Agriculture and Rural Development (NABARD) with trials already under way involving 5,673 such orgs. The ERP will manage loans, procurement, and even HR, while also offering customer-facing tools. Hardware procurement for the giant system has commenced.

The project's budget is around $300 million (₹2,516 crore).

Another massive project, announced last week, will see development of a common platform for 1,851 Agriculture and Rural Development Banks (ARDBs). Branches and back offices will adopt a common platform – again developed by NABARD – and legacy data will be digitized and integrated. Budget for this effort is around $14 million (119.4 crore).

A third project, announced on December 8 by India's Reserve Bank, revealed work to establish a cloud computing facility for India's entire financial sector.

After noting that India's "Banks and financial entities are maintaining an ever-increasing volume of data" and often turning to public and private cloud facilities to do so, the Reserve Bank proposed its own cloud and asserted it would "enhance the security, integrity and privacy of financial sector data."

"It is also expected to facilitate scalability and business continuity," the central bank opined.

The Register asked the Reserve Bank to detail its effort but did not receive a reply.

The central bank does, however, have a plan: it intends the cloud to be built and operated by its wholly owned subsidiary Indian Financial Technology & Allied Services (IFTAS).

"Eventually, the cloud facility will be transferred to a separate entity owned by the financial sector participants," the Reserve Bank announcement stated, adding it will be "rolled out in a calibrated fashion in the medium term."

India's government also plans to build substantial AI infrastructure to help the public and private sectors get the GPUs they need.

India is not yet a source of such accelerators – the nation's semiconductor sector is in its infancy. But the likes of Dell and Lenovo have agreed to manufacture kit in India, as has HP Enterprise. The Indian financial sector's planned infrastructure may well therefore be locally made. ®

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