kishori j udeshi : are banks serving the common man? speech by ms kishori j udeshi, deputy governor of the reserve bank of india, at the lions club of bombay, bombay, 26 april 2005. * * * ladies and gentlemen of the lions club of bombay, thank you very much for giving me an opportunity to share my thoughts with you all. only lions would be courageous enough to listen to a talk on the subject of banking which is dry and devoid of any humour. but if you keep in mind that banks deal with your hard - earned savings, what i have to say may be of interest to you. the reserve bank has been trying to discipline banks with regard to the quality of customer service rendered by them since 1975. you may recall, the times when we had to wait for 20 - 30 minutes to withdraw cash ; at least 2 days to get a cheque book ; 4 hours to get a demand draft ; at least 1 week to get a local cheque cleared and 4 - 6 weeks for an outstation cheque to get cleared ; to face bank staff who were reluctant to update your passbook on the spot and offered least information on the bank ’ s products or their banking practices. look at today ’ s banking services : at the flick of the card you get cash from an atm and if the atm is in a shared network, it is even better because then you don ’ t need to hunt for your bank ’ s atm ; if your bank has a phone banking service, you can get cheque books delivered and cheques collected from your doorstep ; a local cheque gets credited on the third day and an outstation cheque on the fifth day if it is covered under intercity micr processing, but let me add that for both local and outstation cheques, you can get immediate credit if the amount is rs. 15000 / -. banks evolve their own board approved policy for immediate credit of local / outstation cheque, timeframe for collection of local / outstation cheques and interest payment for delayed collection. there is no more fear of pilfered dividend and interest warrants as you can get these sums credited directly to your bank account ; you can effect funds transfers almost instantly by eft. further, internet banking and mobile banking have completely revolutionised the way banking transactions are committed ; this is the epitome of embedding technology with banking – though i am personally saddened by the lack of

instruments issued outside the country but subsequently traded by at least one institution within the country would be liable ). further, evasion could be discouraged by adopting the example of stamp duty in united kingdom, and of brazil, where non - payment of the tax makes legal enforcement of such contracts difficult. there is also significant merit in considering anti - avoidance rules in taxation for regulation of the financial sector as well. thus, if the sole purpose of an instrument or institution in the financial sector is to avoid a regulation, such transactions can be considered void for the purposes of regulation. thus, a distinction can be made in financial sector regulation, as in the case of taxation, between planning, avoidance and evasion. above all, taxation and the use of information thus acquired for regulation of financial sector would considerably enhance the effectiveness of both fiscal and financial management. concluding remarks i believe that society expects central banks to ensure trust and confidence in money and finance, and hopes that they avoid the pitfalls of capture, while the common person seeks inclusive finance. it is not easy for central banks to deliver all this, but they should not ignore society ’ s expectations. in these efforts, central banks need to preserve space for public policy at the national level consistent with their obligations to the global economy. the financial sector may draw lessons from global coordination in other industries, especially in managing networks. global trends in financial sector regulation may see simultaneous re - regulation in some countries and deregulation in others. innovations, by definition, are difficult to put into preconceived straitjackets, and a disaggregated contextual approach would be appropriate. above all, better regulation warrants effective regulation. consideration of regulation, competition and ownership in an integrated manner, enhanced monitoring of financial market activities and the use of fiscal tools to supplement regulation could be helpful in this regard. friends, society has put its trust in central banks. central banks have to ensure that bank managements and the financial sector in general serve the masses, and not merely the elite or the financially active. in the ultimate analysis, central banks are trustees, agents to look after the interests of the masses. references arcand, jean - louis, enrico berkes and ugo panizza ( 2012 ) “ too much finance? ” international monetary fund, wp / 12 / 161. june. www. imf. org / external / pubs / ft / wp / 2012 / wp12161. pdf. balachandran