of an entity to be registered as fii or as foreign venture capital investor, sebi takes into account all factors relevant to the grant of a certificate and in particular the applicant's track record, professional competence, financial soundness, experience, general reputation of fairness and integrity as well as the fact whether the applicant is regulated by an appropriate foreign regulatory authority. in brief, india is yet to consider a policy addressing investments by swfs, except as a part of due diligence in regard to all investors. india as a home country in india, the foreign exchange reserves are on the balance sheet of the reserve bank of india ( rbi ) and are managed as per the provisions of the rbi act, consistent with the global best practices. the reserve bank adheres to appropriate prudential norms and the transparency and data dissemination standards in regard to reserves management. given the significant increase in the level of foreign exchange reserves, there is an increasing expectation in regard to returns. the returns on the foreign exchange reserves, under the present framework, are constrained by the mandate to reserve bank of india, which understandably lays a greater emphasis on safety and liquidity. it may, however, be possible to argue that a part of the reserves, which may be considered to be in excess of the usual requirements, be managed with the primary objective of earning higher returns. given the limitations placed on the central bank by its mandate, it can be held that it will be appropriate to bestow this responsibility on a different sovereign entity. if and when the country considers setting up of a swf for the purpose, one of the methodologies could be to fund swf by purchasing the foreign exchange from the central bank, to the extent required. these foreign currency funds could then be used by the sovereign entity for seeking higher returns by investing in assets, which a central bank ’ s mandate may not permit. as the swf will be a public enterprise, it will be required to conform to the applicable governance, transparency and disclosure standards. while it is possible to make a case for an indian swf, there are also weighty arguments for caution in this regard. first, it would be very difficult to reckon in the indian context – as is the case with many other countries, the “ reserve adequacy ” in a dynamic setting and on that basis divert a part of “ excess ” reserves for a higher return from riskier assets. the current reserves management policy recognises this, based on experience during periods of

profitability of each customer segment and individual customer. when the process is running smoothly, the bank can use business intelligence and planning technologies to monitor the success of its initiatives and feed the information gained back into a continuous improvement cycle ; thus riding its way to success and meet its growth and customer profitability targets. banks should move towards setting new standards that would enable them to attract, retain, and service customers with superior speed, efficiency, and satisfaction. in the banking industry use of information technology ( it ) is omnipresent. from acquiring a customer, servicing the customer ’ s needs, building the customer relationship to managing employees, processes and partners, every action in the bank ’ s value chain relies on technology to ensure efficacy and efficiency. retail banks that will survive and thrive in the current economic climate are using new technologies and channels to grow revenue from basic services, such as deposits and loans, by understanding customer needs, providing relevant products and services cost - effectively and calculating the unique lifetime value of customers to the institution. i would conclude by posing the following three questions to the audience : is it possible for us to make our banking paperless? cheque less? cash less? i know that the answers to these questions are not easy and nobody has a readymade answer. but this should put us on the track to think “ differently ” and think “ big ”. it would definitely take time to achieve the above goals but it is not impossible. let me tell you that this is already happening globally. it is possible for us to leapfrog to achieve the above objectives? i hope it would be possible for the participants this summit to deliberate on these issues and give some broad recommendations for the banking sector to emulate. i wish the summit a grand success. thank you. bis central bankers ’ speeches