Data Localization

Data Localization
21 March 2020

Data Localization

What is data localization? How do you think our overall data is stored and where does our private information about our accounts go? How do we work over the net with our bank account details roaming in our secured net phones? It is all a web of data that goes into making everything possible online. Especially our account details that are stored as data is not completed within the country. And, to change that and make security better, the RBI passed the compliance based deadline for all the companies all over the world for localization of all sensitive data belonging to Indian users of various digital payment services.

What is Data Localization

Data localization refers to the order or process of storing data on any particular device that is/should be physically present within the border of a country. For the required time being, a lot of data is stored in a cloud, outside India. Through Big Data analytics and Artificial Intelligence, the government could come up with new or different domestic policies by accessing its citizens’ or residents’ data. This, however, is one of the RBI's diktats that followed the draft providing data protection law recommended by the Srikrishna committee in July/August. 

The localization of data provides a mandatory order for the companies to store and process the collected critical data about consumers within the country's borders. The circular passed by the RBI making the payments-related data collected by the payment providers to be a mandatory action so as to store only in the country. The deadline for compliance was fixed on the 15th of October. Companies are in running position now to get this compliance done within the timeline and some of them haven’t even started yet. The compliance is to be carried out by the various payment service providers and it includes the card payment services and also the companies that offer electronic or digital payment services.

Why data localization

Data localization is introduced to keep a high-level security check on the data of the country’s citizens. It focuses on protecting the financial information as well as the personal data of everyone in the country. Also, the government took this step to protect the data of our country and avoid foreign countries from monitoring any such data. This gives the local government and regulators the jurisdiction to call for the data when required.  It is a crucial step to protect and provide every measure to let the data of a country stay in the country itself. When data is not localized, it hangs on a great thread of risk, crime, and different kinds of illegal/unauthorized actions. Protecting everything legal about a country is what makes it a strong and powerful country if the data or information of a country is at risk, then it makes it quite impossible to not go through any negative aspect.