liability to the customer. let me now turn to the issue of technology and cost. before i speak my mind on the issue, let me make it very clear that rbi does not support the argument that cash transactions in this country will disappear rapidly or that all paper based transactions would turn electronic if the financial sector was to offer electronic transactions free of cost. in fact, we firmly believe that anything that is offered free of charge can never be scaled up and that it cannot become bis central bankers ’ speeches robust and efficient unless it offers commercial viability to those who offer the product / service. having said that, i also do not support the principle, ostensibly being followed by some of the institutions, to recover a large part of technology expenses from the customers. i was amused at the action of banks deciding to waive charges on “ inter - core ” transactions hitting headlines in the media. it should have never happened in the first place. in fact, such charges, rather than their removal, should have hogged the limelight. further, in an electronic banking scenario, ad valorem charge to customers is an issue which needs to be relooked. in fact, in a country like ours, part of the cost efficiencies achieved through technology must be passed on to the smaller customers. this calls for a rejig in the way in which banks approach technology. in a technology led financial sector, collaboration among all stakeholders, including competitors, could prove to be the big cost saver. with rapid strides in security standards and capabilities, such a collaboration and sharing of it infrastructure is feasible on a much larger scale than is happening today. it is always perceived by the industry that the handholding / intervening by rbi is necessary for the systems to be operational in an efficient manner. i am unable to understand why collaborative approach cannot be the guiding force for success in adoption of shared it infrastructure. reserve bank has contributed to the fostering of innovative methods to improve access to financial services through mobile and opened up and clarified the issue of business correspondent ( bc ) interoperability. leveraging technology for making financial inclusion possible and a success prior to the enablement of bc interoperability, the banks and technology providers had made a case that it was the lack of interoperability, that was a deterrent for financial inclusion and hence, much headway had not been achieved. according to the technology providers, investment in a non - interoperable technology would be a costly proposition and they did not see

challenges for the banks in terms of recruiting skilled personnel and retaining the existing talent, but the larger issue is whether the existing crop of human resources are geared to perform optimally in the existing environment. with this consideration, i would like to give the theme of this conference a wider sweep. you would agree that even in a benign economic environment with good economic growth as also with most banks having adopted technology, the productivity and efficiency in our system continues to be at extremely low levels. also, this period has witnessed significant increase in employee compensation across all cadres in the banking sector. so, the need is to not only prepare our banking personnel to face the adverse developments of future, but also to ensure that they perform optimally and take full advantage of a perfectly favourable environment. hence, rather than attempting to “ future - proof ” the banking personnel, i would like the banks to attempt “ foolproofing ” their employees. by “ foolproofing ”, i mean preparing the employees to deliver what is expected of them. in that sense, the employees need to be proofed against sub - optimal performance under all circumstances, whether favourable or adverse. in my address today, i intend to highlight the key challenges that the hr function in banks in india faces and the measures that are needed for foolproofing the banking personnel not only against the adverse bis central bankers ’ speeches developments but also adequately equip them to perform to their optimal potential in the “ business as usual ” conditions. human resource management ( hrm ) in indian banks 4. hrm can essentially be summarized as a function that entails “ planning, organizing, directing and controlling of activities relating to the development of employees in terms of enabling them to acquire competencies needed to perform their present and future jobs with ease and enthusiasm ”. the hr function in banks is no different from that in other organizations. it is a continuous process that seeks to ensure the development of employee competencies, dynamism, motivation and effectiveness, in a systematic and planned manner. it also deals with bringing about improvements in physical capacities, relationships, attitudes, values, knowledge and skills of the employees for achieving the objectives for which the bank stands. if you ask me how the hr function has fared against the expectations, my unqualified answer would be that they have failed miserably. part of it, especially in the case of public sector banks ( psbs ), can be blamed on the quality and competence of people that manage the hr function in