Page 34 - Banking Finance December 2023

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based architecture. The biggest challenge would be put in place guidelines for the governance and oversight
integration issues with legacy systems. At the same of open banking, including the requirement for banks to
time, considering the risk around data sharing and have a dedicated open banking department.
security, banks would also need to make significant
investments in data monitoring and cyber security. 7. Interoperability: The RBI has also highlighted the need
for interoperability between different open banking
4. Security and Data Privacy: With open banking, there APIs. To ensure interoperability, the RBI has mandated
is a risk of customer data being exposed to third-party the use of standard APIs and data formats.
providers, which could compromise the security and
privacy of customer information. The RBI has mandated In conclusion, open banking is a transformative concept that
that all open banking APIs must comply with the has the potential to revolutionize the financial sector. By
Payment Card Industry Data Security Standard (PCI-DSS) enabling the secure sharing of financial data between
and must be audited by an external auditor to ensure different institutions and third-party providers, open banking
the security of customer data. can drive innovation, competition, and improved customer
experiences. However, as with any new concept, open
5. Customer Consent: The RBI has emphasized the banking also presents significant challenges and threats, such
importance of customer consent in open banking. as security risks, privacy concerns, and regulatory
Customers must be fully informed about the data that compliance issues.
is being shared with third-party providers and must
provide their consent before any data is shared. To fully realize the potential of open banking, financial
institutions must work together with regulators, third-party
6. Governance and Oversight: The RBI has expressed providers, and other stakeholders to establish a robust
concerns about the governance and oversight of open framework that ensures safety, security, and compliance. By
banking. With multiple parties involved in the ecosystem, doing so, the financial sector can embrace the opportunities
there is a risk of regulatory arbitrage and a lack of presented by open banking and deliver better outcomes for
accountability. To address these concerns, the RBI has all stakeholders involved.

Draft documentation for a multi-asset allocation fund, filed by

Mahindra Manulife Mutual Fund.
A draft document for a multi-asset allocation fund has been filed by Mahindra Manulife Mutual Fund. The open-ended
Mahindra Manulife Multi Asset Allocation Fund invests in debt, equity, exchange-traded funds (ETFs) for gold, silver,
and commodities, and exchange-traded commodity derivatives. The first-tier benchmarks for the plan will be 40% of
the CRISIL Composite Bond Index, 10% of the domestic price of physical gold, and 5% of the domestic price of silver.
The benchmark will be 45% of the NIFTY 500 TRI. Renjith Sivaram Radhakrishnan will oversee equity investments,
Rahul Pal will handle debt investments, and Kush Sonigara will handle overseas investments.

Aditya Birla Sun Life Mutual Fund files draft documents for two target

maturity funds
Aditya Birla Sun Life Mutual Fund has filed draft documents for two new target maturity schemes: Aditya Birla Sun Life
Crisil IBX Gilt June 2027 Index Fund and Aditya Birla Sun Life Crisil IBX Gilt April 2033 Index Fund. Birla Aditya With a
somewhat high interest rate risk and a relatively low credit risk, the Sun Life Crisil IBX Gilt June 2027 Index product is an
open-ended target maturity index product that tracks the CRISIL IBX Gilt Index - June 2027. The benchmark for the
scheme will be the June 2027 Crisil IBX Gilt Index. The scheme's investment goal is to produce returns that, before fees
and accounting for tracking mistakes, equal the total returns of the securities represented by the CRISIL IBX Gilt Index
as of June 2027. The plan will mature on June 30, 2027, in accordance with the underlying Index's maturity profile.

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