##entation in indian banking it is now commonplace to say that the 21st century will be the “ knowledge century ” and we are transiting from product - based to knowledge - based economy. the knowledge economy – an economy in which wealth is based upon the ownership of knowledge and the ability to use that knowledge to create or improve goods and services – presents significant challenges. all the more so due to the demographic transition underway now in our country, since knowledge resources such as know - how and expertise are as critical as other economic resources in this economy. india will probably have the world ’ s largest set of young people. even as other countries begin to age, india will remain a country of young people, potentially to our great advantage. the transformation of banking caused by the rapid development of information and communication technologies has provided banking entities with new ways of bringing their products to the customers. the banks would now have to increasingly deal with knowledge workers i. e. one who works primarily with information and uses knowledge in the work place. traditional banking has thus changed into electronic banking, and therefore the standard form of contact – personal contact – is taking a back seat to new, faster, more conformable, and cheaper means of communication. the introduction of electronic banking services also creates new tasks to be faced, such as the optimization of distribution channels and the security of data transfer. the customer will not purchase a service that fails to meet his requirements or a service that does not guarantee the required privacy and security. that is why banks are trying to devote enough attention to all aspects of the modernization of traditional banking. basic electronic banking includes services provided through self - service zones, internet banking, e - mail banking and phone banking etc. a new product is the electronic purse, sometimes called a " multipurpose payment card ", which is a payment instrument for making non - cash payments. the e - shop represents a specific form of electronic banking. electronic commerce comes in three basic forms : the e - shop, e - store, and e - exchange. india ’ s banking industry must strengthen itself significantly if it has to support the modern and vibrant economy which india aspires to be. focusing on enriching human capital will help the banking sector competitive. the banking sector needs to fundamentally strengthen institutional skill levels especially in sales and marketing, service operations, risk management and the overall organisational performance ethic. the last, i. e., strengthening human capital will be the single biggest challenge. old private sector banks also have

be regulatory framework for meeting these challenges? does it not require a 180° change? since there are a large number and variety of financial products involved, what appropriate regulatory framework needs to be in place for effective regulation? the question that may need to be examined would be the appropriateness of single versus multiple regulators. whether the existing regulatory co - ordination mechanism, as followed through hlccfm, continue in the same form? is there a need to separate regulation from supervision? vii ) what should be business model in terms of pricing, marketing, product development? transparency in pricing is the key in the context of the huge volumes involved and banks may need to examine the level of their margins. treating customers fairly will be a crucial issue for gennext banking as the customers will be more educated and aware of their rights. viii ) what should be the approach to risk management framework? in view of the large volume, products and customers involved and the exponential growth taking place in banking services, how risk management will evolve to mitigate the emerging risks? ix ) what are the institutions and supporting requirements and challenges in the technology, communication and network connectivity which will enable seamless services in a secured and cost - effective environment? x ) hr issues will assume prominence as the banks may have to assess the skill requirement for providing such services and accordingly create the workforce. to sum up, i have attempted to outline the scope for increasing the banking industry's operations and competitiveness through information and communication technologies in the context of demographic trends of india and the knowledge economy that we are embarking upon. i hope that this conference will further deliberate on these issues and come out with the appropriate framework to be developed through which all players will work together to establish the system to cater to the requirements of the future. it is important that all the banking products be made available under one roof and provided in a seamless manner ; otherwise, we would lose this opportunity. i am sure that 21st century will be our century and the banking sector will rise to these challenges and more. i wish the deliberations a success. thank you. select reference 1. goldman sachs ( 2007 ), india ’ s rising growth potential, january 2007. 2. government of india ( 2007 ), economic survey 2006 – 07. 3. muhleisen, martin ( 1997 ), improving india ` s saving performance, imf working paper no. 97 / 4, international monetary fund, january. 4. rodrik, dani and arvin