for enabling a reasonable level playing field, there would have to be a gradual convergence in terms of the operating space and flexibility available to each class of entity. in terms of regulatory and prudential norms governing the public and private sector banking operations, there is already a significant amount of convergence. therefore, from prudential perspective, the debate is infructuous. however, the same level of convergence would have to be extended to managerial and operational flexibility of psbs based on certain governance standards. going forward, this will generate the requisite space for both psbs as well as private banks to grow their business and thrive. iv. business models – diversified vs specialised does the promise of niche, specialised banking still hold? with widespread digital revolution and massive penetration of internet in indian households, the need for aligning banking practices of 21st century with new aspirations of india was felt. based on this evolving scenario, a committee under the chairmanship of dr nachiket mor, the then member of central board of rbi, was constituted to study the scope of comprehensive financial services to small businesses and low - income households. the committee submitted its report in 2013 and discussed idea of'differentiated banking'in india on the basis of horizontal and vertical differentiation involving formation of separate stylised banks on the basis of regional / sectoral scope and activities ( deposit, transaction, or credit ). the concept of'payment bank'was first discussed in that report which started the formal discourse on differentiated banking. subsequently, the union finance minister announced in 2014 - 15 budget speech that rbi will create a framework for licensing small finance banks ( sfbs ) and other differentiated banks. in accordance with the announcement, reserve bank issued guidelines for setting up sfbs and payments banks ( pbs ) in november 2014. the specified objectives of setting up of sfbs, as envisaged in the licensing guidelines5, is to further financial inclusion by provision of savings vehicles, and increase supply of credit to small business units ; small and marginal farmers ; micro and small industries ; and other unorganised sector entities, through high technology - low - cost operations. on similar lines, pbs were set - up with the objective to further financial inclusion by providing small savings accounts and payments / remittance services to migrant labour workforce, low - income households, small businesses, other unorganised sector entities and other users6. since their inception, sfbs have started playing a progressive role in mobilising savings from and providing credit to

and the international finance corporation. my personal observations show that many of us, in asia, could study and learn from the public policies in mauritius relating to high coverage and quality of primary education, efficient delivery of health services and protection of environment. yes, we have a lot to learn from each other and there are many areas in which we can cooperate. the two central banks will, i am sure, strengthen the traditional ties. we will carry forward a continuous dialogue to strengthen cooperation between the bank of mauritius and the reserve bank of india. as a reciprocal gesture, let me extend an open and standing invitation to governor bheenick to visit india soon and, in addition, participate in the celebrations of 75th anniversary of the reserve bank, which is due soon in a couple of years from now. thank you all, ladies and gentlemen.