india as a whole in the form of indian financial network ( infinet ), structured financial messaging system ( sfms ), vsat connectivity, cable and leased line connection, fiber optics channels, etc. there have been marked improvements in the indian payment and settlement systems in the form of popularizing and strengthening of real time gross settlement ( rtgs ), centralised fund management system ( cfms ), electronic clearing system ( ecs ), national electronic fund transfer ( neft ), cheque truncation, national financial switch ( nfs ), developments and initiatives at clearing corporation of india ltd. ( ccil ) platform, atms, electronic banking channels etc. to name a few. the facility for inter - bank funds settlement through rtgs is available today across more than 53, 000 branches of banks spread across the length and breadth of the country. today while we have settled close to 100, 000 transactions in the rtgs, the average is around 60, 000 per day. therefore the volume of transactions per branch is still in single digits. at the same time the country is clearing paper cheques close to 50 lakhs per day, with the so called high value clearing clocking large volumes. the high value clearing which settles on t + 0 basis was introduced in this country when we did not have any electronic products. today this clearing entails high levels of operational risk. it is time that we migrate this to electronic mode. rbi would soon be coming out with an approach document in this regard. however, despite the use of electronic methods of payments, the use of cheques will continue. in order to improve efficiency, reduce operational risk and time taken for cheque processing, the reserve bank has initiated steps to introduce a cheque truncation system ( cts ). a pilot project has commenced in the national capital region in delhi where processing volumes have picked up substantially and about 70 % of the cheques are being routed through the cts. we are now expanding the cts to other centres. ultimately the whole country would be connected through 6 or 7 grids. the next grid is planned for chennai covering the southern centres. rbi set up an exclusive institution called the institute for development research in banking technology more popularly known as idrbt at hyderabad in 1997, which implemented, in 1999, the closed user group network – the infinet – as mentioned by me earlier. this was aimed at sharing expensive it resources so as to achieve the economies of

fiscal balance and created an environment in which consumers and businesses can plan for a longer term. sound monetary policies have also been instrumental in supporting growth. • strong and transparent institutional framework. an institutional environment in which contracts can be enforced and property rights can be established promotes economic growth. increasingly, all european countries share such an institutional environment. however, the transparency international rates the nordic countries in the top ten at to the transparency and integrity of their public sector. 6 5. the importance of education and research and development so, good policies, sound institutions and some luck go far in explaining the strong performance of the nordic countries. however, by digging a bit deeper, we can see also the for a more comprehensive assessment of the strengths and weaknesses of the " scandinavian model ", see e. g. chapter 4 in the eeag report on the european economy 2007, prepared by the european economic advisory group at cesifo. for instance, denmark and finland shared the top ranking, and all the nordic model countries were in the top ten, in transparency international's 2007 corruption perception index that looks at perceptions of public sector corruption in 180 countries and territories. see : http : / / www. transparency. org / policy _ research / surveys _ indices / cpi / 2007 crucial role of education and investments in r & d. the nordic countries share a long - tradition of emphasising the importance of education. nordic countries, particularly sweden and finland have high public and private spending on research and development, comparable with that of the united states. the particular character here is a close partnership between public and private sector. this has also fostered innovation in the environment of an open economy. oecd has recently publicized a third so called pisa - study. finland has performed well in all three studies. it was emphasized in the study that good performance in finland did not differ between the regions and correlated less with family background than in most countries. in a small country it is important to get all the talent resources in efficient use. the education is here the main tool. nowadays, the share of the working age population with upper - secondary education, as well as tertiary education, is considerably higher in the nordic countries than in the other eu countries on average. moreover, the participation rates for non - formal job - related continuing education and training are exceptionally high in the nordic countries. 7 the nordic economies have benefited from a well - educated labour force. the skilled labour force has contributed to a rapid diffusion of information and communication technologies,