or resell data onward to “ fourth parties ”, use the data for purposes beyond the customer ’ s original consent and to whether banks or third parties could be remunerated for sharing data. open banking frameworks may also contain expectations or requirements on data storage and security. 8. india has kickstarted its approach to open banking by enabling an intermediary which will be responsible for the customers ’ consent management. these intermediaries are licensed as nonbanking financial companies. in september 2016, rbi announced creation of a new licensed entity called account aggregator ( aa ) and allowed them to consolidate financial information of a customer held with different financial entities, spread across financial sector regulators. in india, aa acts as an intermediary between financial information provider ( fip ) such as bank, banking company, non - banking financial company, asset management company, depository, depository participant, insurance company, insurance repository, pension fund etc., and financial information user ( fiu ) which are entities registered with and regulated by any financial sector regulator. the flow of information takes place through appropriate application programming interfaces ( apis ). 9. the transfer of such information is based on an explicit consent of the customer and with appropriate agreements / authorisations between the aa, the customer, and the financial information providers. data cannot be stored by the aggregator or used by it for any other purpose. explicit and robust data security and customer grievance redressal mechanisms have been prescribed and the account aggregators are not permitted to undertake any other activity, primarily to protect the customers ’ interest. consent based architecture 10. the emphasis of regulatory framework for account aggregators in india is thus on explicit customer consent for data sharing. no financial information of the customer is to be retrieved, shared, or transferred without the explicit consent of the customer. the other tenets of this open banking initiatives in india are – financial data integrity, security & confidentiality, robust it governance & controls, and strong customer protection & grievance redressal mechanism. further, in order to facilitate seamless movement of data & consent - based sharing of financial information in the aa ecosystem, a set of core technical specifications have been framed by 2 / 5 bis central bankers'speeches reserve bank information technology private limited ( rebit ), a wholly - owned subsidiary of the rbi for adoption by all regulated entities, acting either as financial information providers ( fip ) or financial information users ( fiu ) in november 2019. 11

however, on a request to review this approach, an informal group was set up in rbi and the report has been circulated as a discussion paper on the rbi website. after studying the international experience, the group recommended that banks may classify their entire investments into three categories, viz., held for trading, available for sale and permanent. the permanent category should not exceed 25 % of total investment. the group recommended that securities classified as held for trading should be marked to market monthly, if not more frequently. securities in available for sale was recommended for marking to market at the year end or at more frequent intervals as decided by the board of directors. securities held in permanent category can be carried at cost or market value whichever is lower. if you do find it worthwhile to vent your views, perhaps in consultation with bankers present here, please do so and come back to us soon. active consolidation of government debt as mentioned earlier, we made a beginning during the current year with regard to consolidation of government debt. consolidation has improved the liquidity in the market with consequent reduction in the liquidity premium. encouraged by the results, we would now like to embark on an active programme of consolidation consistent with the market borrowing programme of government. currently, there are about 98 outstanding loans with residual maturity of up to ten years, covering 78 % of outstanding value. there are 20 loans with maturity over 10 years covering the remaining 22 %. over the last few years, the investor profile in these loans has changed, partly reflecting the valuation norms introduced by the rbi. a number of banks have resorted to substitution of old loans for new marketable loans. keeping all these developments in view, some options can be explored. wherever there are a large number of fragmented issues in any year, these could be consolidated through recall of some loans against reissue of others. another option is to convert loans maturing, say in the next few years into certain actively traded securities coinciding with the same maturity or with elongated maturity. even if this does not result in reduction in the number of outstanding loans, the objective of improved liquidity in a few benchmark securities will be achieved. pds may like to examine these issues in greater detail. operationalising liquidity adjustment facility the committee on banking sector reforms ( narasimham committee ii ) had suggested that the rbi ’ s support to market should be through a liquidity adjustment facility ( laf ). under this facility, the management of liquidity by the rbi will have