, dr. jha served as india ’ s ambassador to the united states and as governor of jammu and kashmir. he was also a member of the widely acclaimed brandt commission which made a persuasive case for north - south cooperation. that some of the issues raised in the brandt commission are relevant even today is a testimonial to the foresight and wisdom of the commission ’ s members such as dr. jha. 5. this lecture series in his name honours dr. jha ’ s outstanding service to the nation and his leadership of the reserve bank during a very critical period. so far, there have been 11 lectures. the last one was given by prof. john taylor in february 2010, two years ago, on “ lessons from the financial crisis for monetary policy in emerging markets ”. the lecture by prof. obstfeld this evening will be the 12th in the series. the distinguished speaker – prof. maurice obstfeld 6. it is perhaps presumptuous to introduce prof. maurise obstfeld, who is a distinguished academic and internationally renowned economist. regardless, i will indulge in the pleasure of doing so because the occasion demands it. 7. prof. obstfeld is currently the class of 1958 professor of economics and director of the center for international and development economic research ( cider ) at the university of california in berkeley. he got his doctorate from the massachusetts institute of bis central bankers ’ speeches technology ( mit ) in 1979 under the supervision of the legendary professor rudiger dornbusch of the textbook fame. thereafter, prof. obstfeld taught at columbia, university of pennsylvania and harvard before moving to uc, berkeley in 1989. 8. publishing papers is part of plying the trade of being an academic. a few of them also write text books. but far fewer of them write text books that become standard teaching material cutting across university and national barriers. prof. obstfeld belongs to that select category. many among the audience here must have learnt economics from his seminal textbook on international economics, co - authored with prof. paul krugman. 9. economists have been categorized in several ways – classical and neo - classical, macro and micro, keynesian and monetarist, free market and leftist. it is fashionable these days to categorize economists as salt water or fresh water to classify their academic persuasion which, curiously, seems to be correlated with whether their university is located inland or on the coast. prof

76 occasions amounting to ` 122. 9 crore on various commercial banks operating in india. however, fear of fines and penalties will not be enough to keep up with the evolving nature of regulations. but a financial management system with built - in control makes compliance an everyday practice that enables the organisation to operate at greater efficiency. in addition, sound governance creates conducive environment for the values of compliance, integrity, trust, and respect for the law ; to thrive in the organisation ’ s culture. as a result, a bank can empower its entire organization to operate with responsibility while maintaining the flexibility necessary to stay ahead of ever - evolving regulations and business challenges. compliance culture – indian scenario reserve bank of india had introduced a system of “ compliance officer ” in banks way back in august 1992, based on recommendations by the committee on frauds and malpractices in banks ( ghosh committee ). the role of compliance officers came into sharper focus since 1995 when the general manager in charge of audit and inspection was made responsible for the compliance functions, with a requirement for periodic reporting or certification on compliance functions directly to the cmd. however, it was gradually recognized that the circumference of compliance functions in banks needed to be not only enlarged, but also clearly defined, especially in a scenario where successive annual financial inspection reports prepared by the banking supervisor highlighted a host of compliance deficiencies. rbi ’ s recognition for the need and importance of compliance functions received a further impetus after basel committee on banking supervision ( bcbs ) issued the high level paper on compliance risk and compliance function in banks in april 2005. these principles formed the basis for our https : / / in. reuters. com / article / banks - regulator - fines / u - s - eu - fines - on - banks - misconduct - to - top - 400 - billion - by2020 - report - idinkcn1c210d work on issuing rigors for compliance functions in banks, in the year 2007. subsequent to the financial crisis, the focus on compliance has gone up significantly, especially in the area of conduct, kyc / aml, suitability and appropriateness of banking products offered to a specific customer. in this context, and acknowledging the benefits offered by a good compliance culture and costs of poor conduct, the compliance culture of indian banks needs to be strengthened. during the course of the supervisory process, the reserve bank has observed various lacunae in the compliance culture of indian banks. some