remaining tenure would prefer not taking stern action and recognizing npas. they might indeed prefer transferring any problems to their successor. investors in bank shares, at least initially, do not welcome disclosures of loan losses. and depositors, knowing the government stands fully behind public sector banks, are rightly unperturbed by the quality of bank balance sheets. so it is easy to ignore the problem of loan losses and hope it somehow goes away, much as it is easy to ignore moderately high inflation. but as with inflation, loan losses have a tendency to increase. the lesson from other countries is that by the time losses get too big to ignore, they are too late to manage, and the system is in crisis. as with inflation, it is the task of the central bank to press for bank clean up earlier, when few amongst the public support the central bank ’ s activism. fortunately, after an initial reluctance, banks have entered the spirit of the cleanup and some have gone beyond what was demanded of them. the stock market, after reacting negatively initially early this year, has been more supportive of public sector bank stock prices, probably reflecting the belief the cleanup is good over the medium term. promoters are selling assets and paying up, and new asset reconstruction companies are being started to buy assets. to restore bank balance sheets to health, it is important this process be taken to its logical conclusion. criticism of the central bank using arguments unsupported by evidence is not just an indian phenomenon. the bank of england was criticized for laying out the economic costs of brexit, the ecb has been criticized for doing too much to restore health to troubled peripheral economy financial sectors, and the fed is under fire for departing from the taylor rule. criticism comes with the territory, and central banks need to make the case for their policies. at the same time, it is important that governments around the world look beyond sometimes uninformed and motivated public criticism and protect the independence of their central bank to act. that is essential for stable sustainable growth. bis central bankers ’ speeches

vepa kamesam : retail banking - challenges ahead in distribution channels in urban / rural india address by shri vepa kamesam, deputy governor of the reserve bank of india, at the twenty - fifth bank economists'conference - 2003, mumbai, 12 december 2003. * * * the promise of lower transaction costs, increased sales productivity, and more convenient service has lured banks into setting up new delivery channels. earlier, vast brick and mortar branch network has been considered as an inherent advantage of established banks and new entrants were at huge disadvantage vis - a - vis the established players in terms of customer reach. however, post 1990s new players are effectively taking on the branch network advantage of the established players by optimally leveraging technology and cost - effective delivery channels. the goal for banks ’ senior management is to turn today ’ s “ all things to all people ” branch network into highly differentiated system for delivery of multiple products. the foundation for creating such delivery channels is superior insights into customer behaviour. these can come in many forms, but at their most basic they entail understanding customer needs for the delivery of different products, how these needs vary by customer types ( including small businesses ), current customer behaviour ( especially as it relates to channel usage ), and customer profitability. it is this multifaceted understanding of customers that yields actionable implications for distribution strategy. although banks may invest heavily in new delivery channels, the success and sustainability of these channels critically lie in the ability to convert that investment into lower distribution costs. the steps to be followed in making a new distribution channel successful : a ) understand customers ’ current channel / transaction behaviour and their underlying attitude ; b ) use sophisticated experimental customer research to assess the economic impact of tactics designed to change that behaviour ; c ) develop an integrated channel migration plan which blends economic and non - economic incentives to ensure that right initiatives are targeted at the right customers ; d ) protect sales effectiveness by utilizing the ability of non - branch channels to select amongst prospects and differentiate the marketing message ; e ) design non - branch channels to emphasize personalized interaction to counteract decreased loyalty among remote customers ; f ) develop tracking mechanisms to allow you to assess and revise your migration strategy on an ongoing basis. turning our attention to delivery channels used by banks in india, in comparison with their international counterparts, it is observed that the banks are yet to exploit the delivery channels to the maximum extent technology permits. increase in off - site delivery channels has led to new product