k c chakrabarty : indian economy – imperatives for second generation reforms address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the inaugural session of the state level seminar, organized by the department of economics of the vivekananda education society ’ s college of arts, science and commerce, mumbai, 14 september 2012. * * * the assistance provided by smt. rekha misra and shri s. m. lokare in preparation of this address is gratefully acknowledged. dr. suresh kotak, chairman, kotak and co. ltd. ; dr. j. phadnis, principal of the ves college of arts, science and commerce ; shri b. l. boolani, trustee in - charge ; dr. suniti nagpurkar, head of the economics department and convener of the seminar, mrs. dipta dasgupta, my old friend from the banaras hindu university ; faculty members and students participating in the seminar, ladies and gentlemen. it is, indeed, a matter of great pleasure and privilege for me that i have been called upon to address today ’ s seminar, which indeed is topical, given the changing contours of the financial regulatory architecture amidst uncertain global financial market environment. the global banking and financial system is currently undergoing structural transformation with standard setting institutions and national authorities framing new regulatory paradigms to address the weaknesses of the global financial system that surfaced during the crisis. against this backdrop, i am delighted that the vivekananda education society is conducting this state level seminar on this subject. the vivekananda education society, which started its educational activities in 1962, today imparts education to more than 18000 students ranging from primary school to advanced learning in diverse areas such as management, law, engineering, science, etc. with a mission of “ pursuit of excellence in higher education ”, the society has sought to impart quality education and help in character building in students. i am told that the society and this college in particular, were set up to cater to the needs of the socially and economically weaker sections of the population, in line with the recognition that education provides opportunities for improvement in quality of life of these deprived sections. i congratulate the society for completion of 50 glorious years and commend its achievements over this period. i hope that it continues its good work in the times to come. i must admit that interacting with a gathering of teachers and

and tenors. the mibor - based ois remains the only major liquid product in the interest rate derivative market. a term money market remains absent, notwithstanding a host of facilitative policy measures. access of the retail segment to markets, especially derivative markets, needs to improve further. in the forex markets, while corporates benefit from the tight bid - ask spreads, smaller users continue to face pricing disadvantages notwithstanding regulatory requirements for fair and transparent pricing. likewise, there remains a need for improvement in ensuring liquidity for retail investors in the government securities markets. conclusion 26. the journey of indian financial markets through the last decade has been a story of steady progress with stability. we have been steadfast in our commitment and consistent in our approach to keep the ship stable while continuing to move ahead. going forward, greater challenges will emerge as the footprints of indian banks increase in the offshore markets, the range of products expand, non - resident participation in domestic markets grows and as capital account convertibility increases. market participants will have to prepare themselves to manage the changes and the risks associated with globally integrated markets. the achievement of desired outcomes is contingent on financial institutions and market participants taking forward the reform agenda so that we have more vibrant and resilient financial markets. thank you.