India's central bank will offer cloud services to help small banks compete

This would qualify as yet another instance of digital public infrastructure, T Rabi Shankar, deputy governor at the RBI, said. "Especially for smaller entities, cooperative banks and those things, this provides a lot of efficiency in terms of scale, because for each one to maintain their database could involve a large amount of investment, skill and all that which this cloud is expected to provide," he added.

This may also help the regulator to have tighter leash on the movement of data itself. All banks and payment system providers in India have to store payment transaction data within the country.

However, as Rabi Shankar explained, the RBI is focussed on strengthening smaller banks at first, more than data sovereignty.

Digital public infrastructure (DPI) refers to the tools created to enable large-scale access to services and new technology to a wider populace.

Examples of such digital public infrastructure include digital idenitification (Aadhaar card), portals that allow people to apply for things like passport, permits and other services related to governance.

This would also include data collated and delivered via an open database. Data.gov in the United States is a good example of a such a portal. Digital payments infrastructure like the UPI (unified payments interface), health records etc. would  also qualify as digital public infrastructure.