, and all the measures taken to foster the proper functioning of the euro area economy. however, remaining tensions in some euro area sovereign debt markets and their impact on credit conditions, as well as the process of balance sheet adjustment in the financial and non - financial sectors and high unemployment, are expected to continue to dampen the underlying growth momentum. as we said previously, this economic outlook continues to be subject to downside risks, relating in particular to an intensification of tensions in euro area debt markets and their potential spillover to the euro area real economy, as well as to further increases in commodity prices. euro area annual hicp inflation was 2. 6 % in april 2012, according to eurostat ’ s flash estimate, after 2. 7 % in the previous four months. inflation is likely to stay above 2 % in 2012, mainly owing to increases in energy prices, as well as to rises in indirect taxes. on the basis of current futures prices for commodities, annual inflation rates should fall below 2 % again in early 2013. in this context, we will pay particular attention to any signs of pass - through from higher energy prices to wages, profits and general price - setting. however, looking ahead, in an environment of modest growth in the euro area and well - anchored long - term inflation expectations, underlying price pressures should remain limited. bis central bankers ’ speeches risks to the outlook for hicp inflation rates in the coming years are still seen to be broadly balanced. upside risks pertain to higher than expected commodity prices and indirect tax increases, while downside risks relate to weaker than expected developments in economic activity. the monetary analysis indicates that the underlying pace of monetary expansion has remained subdued, with somewhat higher growth rates in the past few months. the annual growth rate of m3 was 3. 2 % in march 2012, compared with 2. 8 % in february. since january we have observed a strengthening in the deposit base of banks. the annual growth rates of loans to non - financial corporations and loans to households ( adjusted for loan sales and securitisation ) stood at 0. 5 % and 1. 7 % respectively in march, both slightly lower than in february. the volume of mfi loans to non - financial corporations and households remained practically unchanged compared with the previous month. money and credit data up to march confirm a broad stabilisation of financial conditions and thereby, as intended by our measures, the avoidance of an abrupt and disorderly adjustment in the balance sheets of credit institutions

about the significance of each of these events. 5. the reserve bank attaches top priority to deepening financial literacy. this means that school children and college students should acquire basic proficiency in financial concepts. why is this important? this is important both for you as individuals and for the country as a whole. when children grow up and start earning, they should know their options – where to save, when to save, how and how much to save. only when you are able to evaluate your options will you become responsible adults. this is important at the aggregate level too. when you save, your money becomes available to the government and to other private sector for investment. and that investment raises our growth rate and creates jobs. i want all of your school children and college students to study well, in particular try and understand the world of finance. i also want to request the education department of government of karnataka to do an evaluation of the introduction of the finance curriculum after one year. based on your feed back, we can improve the lessons and instruction material both here in karnataka and all other states. 6. now let us know more about financial literacy. banking facilities are still not available to many villages. out of about 6 lakh villages in our country, 5. 7 lakh villages still do not have any bank branch. at the earliest, banking facilities should be provided to these villages. for this purpose, technology should be used to open no frill accounts. the banking facilities can be made available the door step of the villages by appointing one of the villagers as banking correspondents. bio - metric smart cards may be provided to the no - frill account holders. bio - metric smart cards should be imbedded with photograph and finger print of the account holder. this facilitates acknowledgement for the transactions done by the depositor. their day - to - day transactions may be uploaded to the bank branch either through telephone or internet. the benefit of government schemes may be directly and speedily credited to these no frills accounts. this is being implemented in six districts of karnataka with an aim to extend the same through out the country. 7. we have organized various curricular and non - curricular programmes for improving financial literacy amongst school children. the education department of government of karnataka have revised the high school textbooks for the year 2010 – 11 as per our suggestions. as part of non - curricular activities we have organized state level quiz competition. about 6100 schools and 3000 colleges took part in this