be achieved without the bis central bankers ’ speeches development of new business ideas, innovative products and services and focus on retention of customers. financial inclusion and technology 18. financial inclusion is high on the agenda for the reserve bank as well as banks. operating cost of providing financial inclusion and charges levied on the users are important dimensions of the process of financial inclusion. technology has to play an important role in reducing the transaction cost of banking services, particularly in the rural and unbanked areas so as to make financial inclusion a commercially viable proposition for banks. this may come about, for example, if banking service providers are willing to enter into passive infrastructure sharing. the challenge for banks, in the context of financial inclusion, would be to get the technology pieces together and adopt a strategy that is viable and sustainable in the long run. 19. major steps have been taken by reserve bank of india ( rbi ), government of india and banks, to enable financial inclusion of weaker sections of the society. it is the differential factor in this regard. the game changers in the realm of financial inclusion i. e. the uid project, mobile banking, hand - held devices, smart cards, business correspondents, routing of payment under government social schemes through banks and micro - finance, are the factors that will take financial inclusion a long way in the country. technology management 20. technology includes the use of materials, tools, techniques and sources of power to make life easier or more pleasant and, work, more productive. whereas science is concerned with “ how ” and “ why ” things happen, technology focuses on “ making ” things happen. technology influenced human endeavour as soon as people began using tools. it accelerated with the industrial revolution and the substitution of machines for animal and human labour. accelerated technological development has also had costs, in terms of air and water pollution and other undesirable environmental effects. 21. another aspect of relevance in the present circumstances is technology management. as we are aware, technology management is a subset of management discipline that allows organizations to manage their technological resources to create competitive advantage. each organization has to decide its strategy, possibly, by identifying emerging technologies to suit business and market needs. 22. the role of the technology management function in an organization is to understand the value of technology for the organization. continuous development of technology is valuable, as long as there is a value for the customer and, therefore, the technology management function in an organization should be able to guide when to invest on technology

is important to identify the sources of reserve accretion in this latest episode. there are some countries like russia where the reserves are built out of current account surplus. in countries like china, korea and taiwan, the surplus, in both current and capital account, led to accumulation of reserves. on the other hand, there are countries like india, where the reserves accretion was driven more by capital account surplus and not due to current account surplus, broadly implying that capital inflow was more than what could be normally absorbed in the domestic economy. net capital flows have remained much larger than the current account deficit in india as well as in most of latin america and central & eastern europe. in case the reserve accumulation is due to large capital flows, it may be useful to distinguish between debt and non - debt flows as also between foreign direct investment and generally less stable portfolio flows. in fact, the stock as well as flow in each category would be relevant for reserve management. while the marking - to - market of the assets and liabilities may be difficult, it might not be irrelevant. thus, while the traditional indicators of adequacy of reserves are based on trade, debt and monetary indicators, or even the ‘ guidotti rule ’ or ‘ liquidity at risk ’ rule suggested by alan greenspan may help explain the adequacy of reserves, they need to be supplemented with, what may be described as, multiple indicators to assess the adequacy of reserves of any country at a given juncture. ( iii ) difficulties in computing quasi fiscal cost of reserves a simple method of calculating net cost of carrying reserves to the central bank is the difference between the interest rate on domestic securities and the rate of return earned on the foreign exchange reserves adjusted for any exchange rate change. the magnitude of the cost, which is often difficult to estimate, varies with the extent of sterilisation and the yield differentials. these are termed “ quasifiscal ” costs in the literature since the costs to the central bank are passed on to the sovereign through a lower transfer of profits. in countries where local interest rates are well above international levels, such carrying costs could be positive, while if the reverse is true such carrying costs could be negative. a recent study by the bis has shown that carrying costs are negative in a number of countries at current interest rates. the study states that in china, for instance, the one year interest rate in june 2006 was less than half the comparable us treasury bond