In recent times, automated detection of diseases from pathological images leveraging Machine Learning (ML) models has become fairly common, where the ML models learn detecting the disease by identifying biomarkers from the images. However, such an approach requires the models to be trained on a vast amount of data, and healthcare organizations often tend to limit access due to privacy concerns. Consequently, collecting data for traditional centralized training becomes challenging. These privacy concerns can be handled by Federation Learning (FL), which builds an unbiased global model from local models trained with client data while maintaining the confidentiality of local data. Using FL, this study solves the problem of centralized data collection by detecting deformations in images of Red Blood Cells (RBC) in a decentralized way. To achieve this, RBC data is used to train multiple Deep Learning (DL) models, and among the various DL models, the most efficient one is considered to be used as the global model inside the FL framework. The FL framework works by copying the global model’s weight to the client’s local models and then training the local models in client-specific devices to average the weights of the local model back to the global model. In the averaging process, direct averaging is performed and alongside, weighted averaging is also done to weigh the individual local model’s contribution according to their performance, keeping the FL framework immune to the effects of bad clients and attacks. In the process, the data of the client remains confidential during training, while the global model learns necessary information. The results of the experiments indicate that there is no significant difference in the performance of the FL method and the best-performing DL model, as the best-performing DL model reaches an accuracy of 96% and the FL environment reaches 94%-95%. This study shows that the FL technique, in comparison to the classic DL methodology, can accomplish confidentiality secured RBC deformation classification from RBC images without substantially diminishing the accuracy of the categorization. Finally, the overall validity of the classification results has been verified by employing GradCam driven Explainable AI techniques.