monopolies. pre - reform status the regulatory framework for the banking industry under the banking regulation act was circumscribed by the special provisions of the bank nationalisation act both of which had elements of corporate governance incorporated with regard to composition of board of directors in terms of representation of directors, etc. while technically there was competition between banks and nonbanks and among banks, substantively, competition was conditioned by policy as well as regulatory environment, common ownership by the government and agreement between the government of india as an owner and the workers represented by the unions. subsequent efforts during the reform period in terms of hesitancy in permitting industrial houses as well as foreign owned banks should be viewed in this historical context. as regards the policy environment, it must be recognised that almost the whole of financial intermediation was on account of public sector, with psbs being the most important source of mobilisation of financial savings. resources for dfis were also made available either by banks or mostly created money and governmental support. the major thrust was on expansion of banks ’ branches, provision of banking services and mobilisation of deposits. the interest rate regime was administered with interest rates fixed both on deposits and lending. at the same time, there was large pre - emption of banks ’ resources under the cash reserve ratio or in the form of statutory liquidity ratio. the delivery of credit was also by and large directed through an allocative mechanism or as an adjunct to the licensing regime. in the process, the private sector banks tended to be confined to the local areas and were unable to expand in such an environment. banks, mainly public sector banks became the most dominant vehicle of the financial intermediation in the country. to a large extent, entry was restricted and exit was impossible and there was little or no scope for functions of risk assessment and pricing of risks. the government, thus combined in itself the role of owner, regulator and sovereign. the legal as well as policy framework emphasised co - ordination in the interest of national development as per plan priorities with the result, the issue of corporate governance became subsumed in the overall development framework. to the extent each bank, even after nationalization, maintained its distinct identity, governance structure as incorporated in the concerned legislations provided for a formal structure of relationship between the rbi, government, board of directors and management. the role of the rbi as a regulator became essentially one of being an extended arm of the government so far as

division of tasks with the imf and in coordination with other multilateral development banks, international financial institutions, and the donor community. the diffusion and depth of the crisis put an extra premium on the role of both bretton woods institutions, as providers of financial and advisory services and as facilitators of international dialogue. the economic stimulus that is required is an opportunity to respond to both immediate economic needs and long - term development priorities, building resilience to environmental, economic and social vulnerabilities. it presents a chance to kick off a new phase of reconstruction, steered toward poverty reduction and inclusive, sustainable growth. and it may allow us to refocus our efforts towards meeting the sustainable development goals. most ida countries lack the resources necessary to mount an emergency response while maintaining adequate spending on health, education, social safety nets, and job creation. we welcome the proposal put forth by the wbg and the imf and endorsed by the g20 for all official bilateral creditors to temporarily suspend debt - service payments from the poorest countries to help them meet their financing needs. we look forward to an effective coordination and broad participation of all major creditors, to ensure the success of this initiative.