As India is evolving digitally, security measures to protect its citizen’s data are also evolving. In the financial sector, RBI is coming up with regulations which will enhance the overall security of data in the said domain.
Security concerns are not only related to financial data the Indian government is working on Personal Data Protection Bill, 2018. It becomes clear how strong the stance of Indian policymakers is on data privacy and security.
In April 2018 RBI put out a notification requiring that “all system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India”. After this notification, many global and Indian firms have had a mixed response.
Reasons why India should have absolute power over its own data:
India is a developing mixed economy standing at sixth –largest economy by nominal GDP. The long-term growth prospects of the Indian economy is positive due to its young population and the Indian government is driving India’s economy to be the less-cash economy, it becomes necessary to also think about the security of its financial data.
- As fast as the Indian economy is growing, it must make itself capable of fighting against any foreign attacks.
- To make its payment systems less prone to foreign policies and politics.
- As of now, RBI cannot monitor digital payments activity if all the transactions are processed and stored abroad.
- RBI cannot prevent against any cyber warfare attacks on Indian data if it is stored outside the boundaries of India.
- If a foreign government suddenly decides to put any sanctions on India then critical payment systems may disrupt and Indian economy can crash in this kind of a situation.
- Financial data today is recognized as a massive source of national wealth creation by most governments around the world and are rapidly plugging any loopholes that would allow foreign companies to exploit local market data without paying fair taxes.
It becomes clear how this regulation will have effects on the payment systems across India.
Many firms are lobbying against it due to the availability of resources such as Data Centres in India and the increase in cost by storing and processing data locally. On the contrary, these resources are available easily as provided by major Cloud providers like Microsoft, Amazon, and Google.
Spice Money is committed to the security of its consumer data whether it is financial or otherwise and supports this step of RBI to its core and has since then localized its data processing in India.
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