There are a few thing at play here.
For a while, Indian govt has wanted to control and have access to payment data, similar to what China has implemented. RuPay was a start but has limited adoption.
Earlier outages at HDFC & SBI enabled the RBI (regulators) to ratchet up oversight, with some of their requirements & practices being ridiculous & nonsensical.
Data localisation was the start, under the guise of privacy it’s putting data where Indian govt can exert more control. RBI decided to flex their muscles by preventing some FIs from acquiring new customers despite agreeing to proposed timelines.
Now they are going for development & operations. This is not about risks & resilience, it’s about access to their citizens data and a degree of control over their finances.
Tax evasion is a big problem in India, but this is the thin end of the wedge.