head of population of any country – triple those of germany and quintuple those of the us ( left - hand side of slide 8 ). the snb ’ s gold reserves have remained constant in recent years and it has no plans to sell its holdings. the value of our gold reserves has thus moved in line with the gold price in recent years ( right - hand side of slide 8 ). however, given the substantial increase in the snb ’ s foreign exchange reserves since 2009, the share of gold as a percentage of total currency reserves has indeed changed, recently falling to just below 8 %. now let us turn to the gold initiative, which goes to the vote in just a few days. the supporters of this initiative are demanding that the snb hold at least 20 % of its assets in gold and at the same time requiring a ban on ever selling gold again. moreover, the initiative demands that the gold must be stored exclusively in switzerland. in order to achieve the share of 20 %, the snb would have to almost triple its gold holdings within five years. in practice, given today ’ s balance sheet total and gold price, the snb would have to purchase bis central bankers ’ speeches around chf 70 billion worth of gold – around two - thirds of the world ’ s total annual gold production. the snb considers the initiative to be unnecessary and harmful. its legal mandate is to ensure price stability. in a system of flexible exchange rates, gold is no longer required for it to perform this function and the gold initiative is therefore unnecessary. price stability and the stability of the swiss franc are not determined by the share of gold in the snb ’ s balance sheet, but by its monetary policy. it has achieved these goals more effectively than virtually any other central bank : average inflation has remained below 1 % for the last 20 years, and never in the history of the snb has there been such a sustained period of low and stable inflation. prescriptions on the share of gold in the balance sheet, coupled with a sales ban, would make it considerably more difficult for the snb to fulfil its mandate in future. for this reason, the gold initiative is harmful. in order to pursue a stability - oriented monetary policy, the snb needs to be able to supply the swiss economy with swiss franc liquidity quickly in periods of crisis. the snb ’ s balance sheet expands when liquidity is increased. in the aftermath of a crisis, it

banking services to all villages with population more than 2000 by march 2012 has been successfully met and we are on our way to ensure the same for all villages in a time bound manner. the focus has bis central bankers ’ speeches now shifted from just opening of accounts to the volume of business transacted in these accounts, which is the key for making the fi model a success. bc based delivery model delivery of financial services through the bc model would be key to the success of our financial inclusion initiatives. if the bank - led model is to succeed, it is imperative that it is able to leverage upon bcs to deliver efficient and cost effective access to services. however, our current experience is that the bc based delivery model is still evolving. while banks are experimenting with various ideas in search of the optimal delivery mechanism, it still continues to be the weakest link. the bc model has faced challenges from various sources such as viability issues resulting from delays in payment of remuneration to field bcs, technology and connectivity issues, turnover of bcs and building up faith and acceptability of bcs among the targeted population. i hope that major players in this segment will come up with suggestions to overcome the problems currently being faced by the industry and work towards making it a success. i would also like to congratulate the organisers of this conference as this important aspect is being deliberated upon for the first time. where do non - mainstream institutions like mfis fit in? though, we are of the belief that sustainable financial inclusion is achievable only through mainstream financial institutions i. e. banks, as the penetrative reach of banks is low and they have still not been able to reach a large number of villages in the country, other intermediaries, which have the ability to reach the excluded segments of the society are required. microfinance institutions fill this niche space and to that extent, play a critical role in financial inclusion. the mfis have served the underserved / un - served populace in the last few years and have improved access to credit. it is our considered view that in the next decade, mfis will help in financial deepening and will continue to remain an important segment of the indian financial market keeping in view the present level of penetration of the banking system. the conceptual framework underlying mfis, however, calls for a change. they must revisit their business model to support the income earning ability of the borrower. m