as members, heads of other regulatory agencies as well as all the deputy governors of reserve bank of india and the finance secretary. in july 2008, the reserve bank set up a financial stability unit ( fsu ) with a mandate to, inter alia, conduct effective macro - prudential surveillance of the financial system on an ongoing basis to enable early detection of any incipient signs of instability. with the establishment of the fsu, the reserve bank started publication of half yearly financial bis central bankers ’ speeches stability reports ( fsrs ) – which now forms a critical tool for the reserve bank in its attempt to communicate the potential systemic risks facing the financial system. financial stability analytics a number of initiatives have been taken to improve the financial stability analytics to take full account of the different sources of systemic risk. a series of indicators and indices have been developed to assess the health and resilience of the financial system on an ongoing basis. a banking stability indicator is being used by the reserve bank to monitor the dimensional riskiness of the banking system in the country. it presents an overall assessment of changes in the underlying conditions and risk factors having a bearing on the stability of the banking sector based on the five dimensions of, soundness, asset quality, liquidity, profitability and efficiency. a financial stress indicator – a contemporaneous indicator of conditions in the equity, foreign exchange and interest rate markets and in the banking sector – has been developed to assess the degree of stress in the financial system and to forecast market conditions in the near term. imbibing the lesson from the global financial crisis about the importance of interconnectedness in the financial system, a model of the bilateral exposures in the banking system and the broader financial system has been developed with a view to assess the degree of interconnectedness in the system and to analyse the possible contagion impact of the idiosyncratic failure of a bank. the model uses cutting edge techniques in analysing the network of the indian financial system and identifying, on a real time basis, buildup of excesses and risk concentrations, if any. advanced stress testing techniques are being used to assess the resilience of the financial sector. a series of banking stability measures ( in the form of banking system ’ s portfolio multivariate density ), including a “ toxicity index ”, a “ vulnerability index ” and “ cascade ” effects have been developed for the purpose of assessing the systemic importance of individual banks5. also, the

of view, xml messages are actually easier to work with, than other formats. for most contemporary systems, xml is the default format when exporting data. it is, therefore, easier to create a file in this format. hence for our rtgs, it was a natural choice. 4. i am sanguine that this seminar would provide a common platform for sharing experiences across various jurisdictions and will be a learning experience for each one of us. reserve bank is, perhaps one of the few, if not the first, central banks to adopt iso 20022 messaging standards for rtgs. this is the result of a successful collaboration and hard - work of officers of reserve bank, banks and other stake holders in the country. adoption of technology in clearing operations : from manual to mainframe 5. india has made rapid strides in adoption and leveraging of technology, especially in financial sector. a couple of decades ago, our banking and payment systems were driven by manual processes – we had clearing houses at district levels where bankers would sit across tables and conduct the cheque clearing operations. with the advent of core banking solutions ( cbs ) and other innovative measures which leveraged technology, clearing operations have been computerised and a wide array of products, such as, micr based bis central bankers ’ speeches clearing, speed clearing, etc. have been introduced. another innovative clearing mechanism is our grid based cheque truncation project ( cts ) which is operational in three grid centres, viz., new delhi, mumbai and chennai. as you would appreciate, the grid based cts clearing operations are heavily dependent on technology and has little scope of manual intervention. further, in order to bring homogeneity in the security features of cheques and reduce incidence of frauds in the cts clearings, new cheque standards – cts 2010 have been implemented. over the years a number of electronic products have gained popularity. similarly, there have been a number of developments in manner of processing electronic payments viz., moved from ecs ( local ) to necs ( centralised ). the other electronic payment systems which have gained popularity are the neft and rtgs. encouraging electronic payments 6. reserve bank remains committed towards providing a safe, efficient, accessible, inclusive, interoperable and authorised payment and settlement systems for the country. today, our payment systems are driven by demands of convenience and ease of use & access. this necessitates convergence of e - payment products by leveraging on