“ membership ” model is also seen as an effective solution for banks. the regulatory initiatives relating to atm, pos and mobile banking which have resulted in these infrastructures becoming national are important steps towards these goals. however it may be necessary to ponder and evaluate the benefits of technology for a common customer of a bank. an average customer of a bank has a savings bank account, a fixed deposit account, makes a few remittances in a year and has a loan account as well. has he been able to make use of technology for the conduct of these transactional services, especially if he has no access to the internet? such a customer may still have to continue through branch based banking and may not really feel the benefits of technology at all. an issue that has caught the fancy of all, these days is cloud computing which as you know may be understood as “ a model for enabling convenient, on - demand network access to a shared pool of configurable computing resources ( e. g. networks, servers, storage, applications, and services ) ”. however, the processes for cloud accreditation, cloud audit assurance, etc. are yet to mature. further, issues relating to cloud governance, data security and privacy for customers of banks, etc. are also yet to be completely examined. in short, cloud computing solutions do provide an opportunity for development, but, subject to resolution of critical issues relating to security, privacy and governance. use of technology to facilitate regulatory compliance now let us shift our focus to other issues that banks are grappling with, especially those related to credit risk and need for complying with kyc / aml / cft requirements. can use of technology or shared efforts make these tasks easier without compromising on quality? the step taken by the securities exchange board of india in setting up a kyc registration agency ( kra ) is often cited for replication in the banking industry. as you may aware, a working group constituted by the government of india has proposed the introduction of unique identifiers for customers across different banks and financial institutions ( fi ) for setting up a centralized kyc registry. in fact, banks have been advised to make an immediate beginning to issue a unique customer identification code ( ucic ) 3 for their customers. this ucic would enable the banks to identify a customer, track the facilities availed, monitor financial transactions in various accounts, improve risk profiling, take a holistic view of customer profile and smoothen banking operations for that

recent years. finally, the recent decline in energy prices, if it is sustained, should reduce cost pressures along the production chain. one upside risk to the inflation outlook comes from the labor market. the unemployment rate declined steadily between the second half of 2003 and the beginning of 2006 and has stood at a relatively low 4. 7 percent for the past six months. with labor markets comparatively tight by historical standards, unit labor costs have begun to accelerate, especially since the end of last year, and firms may pass on some of these higher costs to consumers. however, the large markup of prices over costs - the margin is currently well above its historical average - could act as a shock absorber if cost strains were to intensify. thus, in my judgment, inflation appears poised to decelerate in coming months as energy prices stabilize and resource pressures ease. but the risks to that outlook seem tilted toward the upside. aggregate supply in considering the appropriate setting for monetary policy, the level of the economy ’ s underlying productive capacity - its potential output - is the benchmark against which we assess actual output. accordingly, whether the recent slowdown in economic activity eases resource constraints enough to reduce inflationary pressure depends importantly on how fast potential output is growing. if the key determinants of potential output - the workforce, economic efficiency, and the capital stock - grow quickly, as they did in the second half of the 1990s, then gdp can also rise quickly without increasing the pressure on the economy ’ s resources. conversely, a reduced rate of growth of potential output would require slower growth of actual gdp to keep resource pressures from increasing. i ’ d like to spend a little time examining in greater depth the outlook for some of the factors that determine potential output, starting with the labor force. the size of the labor force depends on a combination of two factors : the size of the working - age population and the likelihood that members of this population join the labor force - a likelihood that economists refer to as the labor force participation rate. the labor force participation rate tends to vary over the business cycle as potential workers become more or less encouraged about job prospects. however, the influence of labor force participation on potential output does not depend on short - run conditions in the labor market but rather on long - run changes due to demographic and social factors. for instance, in the 1950s and 1960s the labor force participation rate stood at just under 60 percent. in subsequent years, women entered the labor force in large numbers and