are being taken by the government to promote insurance and pension sectors. while, to some extent banks can undertake the maturity transformation, to mitigate the risk of such transformation beyond acceptable limits, the only option is for government itself or government entities like iifcl to provide appropriate risk mitigants till natural long term institutional investors emerge in a big way. to come back to repos in corporate bonds, rbi has already set out the pre - conditions for allowing repos in corporate bonds : viz., an efficient and safe settlement system based on dvp and availability of fair prices. the permission to the clearing houses of the exchanges to open a transitory pooling account with the rbi is the first step taken to provide an environment for an efficient and safe settlement system. draft guidelines for allowing repos in corporate bonds will be placed shortly on rbi ’ s website for wider dissemination and comments. take out financing is one method of addressing the alm issue. some argue that take out financing has not worked because of the higher capital requirements that needs to be maintained, both by the financial entity offering the asset for takeout as also the bank financing the infrastructure. in case of organisations like iifcl offering take out, this should not be an issue. however we are having a relook at this constraint. issuance of long term bonds by banks with special incentives for investors is another suggestion that is made for addressing the problem of asset liability mismatch. while this is being examined, it needs to be mentioned that the recent introduction of the 10 year future on the exchanges can perhaps help in developing products to mitigate the interest rate risk for infrastructure projects. to conclude, there is need to address the non credit issues in agricultural credit, credit and credit plus issues in mse financing and a variety of innovative risk mitigants in infrastructure financing to make sure that the indian banking system can play its due role in capital formation in these three vital sectors of the economy so critical for sustainable inclusive growth. references reserve bank of india ( 2009 ) : annual report planning commission ( 2008 ) : 11th five year plan – 2007 - 12 government of india ( 2009 ) : economic survey, 2008 - 09, ministry of finance government of india ( 2009 ) : annual report, ministry of micro, small and medium enterprises

chea chanto : opening remarks at the bis advanced reserve management workshop opening remarks by h. e. chea chanto, governor of the national bank of cambodia, at the advanced reserve management workshop, siem reap, 21 april 2009. * * * - mr. eli remolona, chief representative, bis asian office, - mrs. miranda tam, deputy chief representative, bis asian office, - mr. jean - pierre matt, head of financial analysis of bis head office, - distinguished guests, ladies and gentlemen, good morning! today, i have the great pleasure and honor to be invited to deliver some opening remarks for the bis workshop on advanced reserve management. this is the first time that the bis organize such a workshop in cambodia and i hope there will be more opportunities to join together in the future. taking this opportunity, i would like to express my warmest welcome to the bis resource speakers from bis head office and bis asian office and central bank participants from the asia and pacific region to this workshop as well as to cambodia. i sincerely appreciate the bis for their selection of the ancient capital city of angkor in siem reap province as the site for this workshop. distinguished guests, ladies and gentlemen, let me share with you a brief outline of cambodia ’ s economic development in recent years. cambodia is considered a small open economy, one which realized average gdp growth of about 10 % from 2005 to 2008 and gradually increased the level of international reserves to a level which can ensure 3. 8 months of imports. the financial system in cambodia, which is dominated by the banking sector, is considered strong. this is reflected in figures from the end of 2007 which show that total banking assets increased by 53. 6 %, bank deposits rose by 59. 4 %, and loans to the private sector went up by 52 %. however, with the global financial crisis that has affected most of the continents, cambodia ’ s total banking assets declined a bit in the last quarter of 2008 and the economy is expected to have very little growth in 2009. the national bank of cambodia still manages its reserves in a conservative manner, with principle strategies prioritized by : first, safety ; second, liquidity ; and third, returns. this conservative strategy is appropriate in light of the current financial turmoil. but with gradual increases of reserves, one ’ s portfolio should be well diversified and reserve managers should have a solid risk management and analytical skills. therefore, capacity building needs to be continuously strengthened.