landscapes. 15. to prepare for the future, indian banks will need to focus on digital transformation, enhance customer experience, adopt innovative technologies such as ai and blockchain, invest in cybersecurity measures, look for opportunities to derive synergistic benefits through collaboration with other players as well as upskilling their workforce to meet the demands of the digital era. additionally, they will need to prioritize risk management, regulatory compliance, and sustainability to ensure long - term resilience and competitiveness in the evolving banking landscape. conclusion 16. in conclusion, i would like to reiterate that the role of the board of directors in ensuring sustainable growth and stability of the banking sector cannot be overstated. as custodians of the interests of various stakeholders, including depositors, shareholders, regulators, and the wider society, boards must adopt a proactive and strategic approach. effective risk management, governance, and compliance practices are essential in safeguarding the bank's reputation, financial stability, and long - term viability. moreover, the board must ensure that the bank's business model, strategy, 4 / 5 bis - central bankers'speeches and operations are sustainable and create long - term value for all stakeholders. finally, the board must remain vigilant, adaptive, and continuously assess the bank's performance, risks, and opportunities, and take timely and informed decisions. i urge all board members to embrace these principles to drive the bank towards sustainable growth and stability, while safeguarding the interests of depositors and maintaining the stability and integrity of the banking system all the time. thank you. 5 / 5 bis - central bankers'speeches

damage, legal and regulatory consequences, erosion of customer trust, and adverse financial impacts. role of the board 4. the evolving nature of risks faced by the banking system necessitates the building up of organizational resilience to adapt to the changing landscape and stay prepared for future risks. good governance is at the core of organisational resilience and effective boards are the starting point of good governance. while good corporate governance is 2 / 5 bis - central bankers'speeches essential for all institutions, the governance structure and processes of the banks are expected to be even more robust as banks and financial institutions are different from other business entities in many ways. i. firstly, banks are allowed to raise substantial amounts of uncollateralized deposits. unlike other corporates, shareholders only provide 3 to 4 per cent of the funds in banks and the predominant suppliers of finance are depositors. ii. secondly, banks perform the function of liquidity and maturity transformation which makes their business inherently risky. such high leverage and maturity mismatch between assets and liabilities cannot be sustained unless banks gain the trust of the depositors. hence, the governance structures and practices in the banks should prioritise depositors'interest and maintaining their trust. 5. effective governance requires a competent and independent board effectively overseeing the management by asking the right questions, formulating appropriate strategies keeping in mind the risk appetite as well as establishing proper policies and procedures. 6. i would urge boards to actively engage in risk oversight, pursue a robust risk management framework, monitor key risks, challenge management on risk - related matters, and ensure the implementation of appropriate risk mitigation measures to protect the bank's interests and stakeholders. 7. another aspect that boards must lay due emphasis on is compliance. compliance in letter and spirit is critical for banks to maintain the integrity of the financial system and to promote ethical behaviour. banks must ensure that their actions are compliant with the intended purpose and principles of a law or regulation, and not just the literal or technical interpretation. compliance with the spirit of the law is essential for banks to maintain their reputation, build trust with customers, and promote ethical behaviour. 8. finally, it is important for banks to keep sustainability in mind. this means taking a long - term view of the business and considering the impact of decisions on the bank's financial health, reputation, and broader societal and environmental factors in future. role of supervision 9. on its part, the reserve bank has initiated a series of steps