of the financial service providers well - equipped to meet the needs of driving the process of financial inclusion in terms of knowledge, skill and attitude? do these people have the capacity, comprehension and commitment to identify potential customers and offer them timely advice and comprehensive services? many of these are the age - old questions which unfortunately remain pertinent even today and pose a significant challenge to the policy - makers and regulators. having spoken about the challenges, let me outline some of the developments that have taken place in recent times in rural finance space with specific reference to the three sub - themes of this seminar and highlight some of the critical issues related to these sub - themes. capital formation in agriculture and rural infrastructure trends in capital formation in agriculture and agricultural credit 4. in any discourse on rural development, agriculture is put on the top of development agenda and for valid reasons too. around 50 per cent of population depends on agriculture for its livelihood. a positive relationship has been found between agriculture growth and poverty reduction. also, improved growth in agriculture tends to trigger rural non - farm activities which can bring down rural unemployment. further, there are various forward and backward linkages of agricultural sector with other sectors of the economy. in the past couple of decades, a rapid decline in the share of agriculture in gdp, however, has been witnessed without a commensurate decline in labour force dependent on agriculture. another sign of concern has been a deceleration in the growth of gross capital formation ( gcf ) in agriculture in real terms in the recent past. moreover, gcf in agriculture has generally grown at a rate slower than the rate of growth in overall gcf over the last decade, except for a spurt between 2007 – 08 and 2008 – 09 ( chart 1 ). bis central bankers ’ speeches 5. the elementary growth theory tells us that the growth of a sector depends upon the investments made in that sector, its capital - output ratio, and the efficiency of capital in that sector. during much of the period from 1980 – 81 onwards till 2007 – 08, the investment rate in agriculture ( gcf as per cent of gdp in agriculture ) was always below 16 per cent. it is only in recent years that this rate has crossed the 16 per cent mark and we have seen some positive results on the agricultural growth front. in fact, the rate of investment was 22. 7 per cent in 2009 – 10. it has, however, shown fluctuations thereafter ( chart 2 ). 6. it is

where an insurer authorised in another member state operates in ireland through a branch or under the freedom to provide services provisions, commonly referred to as “ passporting ", prudential supervision is the responsibility of the supervisory authority of the member state which authorised the insurer. however, where an insurer offers its products to irish consumers, it is subject to the consumer protection regulatory framework in ireland cost of insurance recognising that there are many factors influencing the price and availability of insurance, the department of finance is leading a wide - ranging “ insurance policy review ", the first phase of which concluded with a report which issued in january this year. this report complements the finance committee ’ s own report on the issue. the central bank is a member of the cost of insurance working group, which is carrying out this ongoing review. concerning the recommendations on the cost of motor insurance, we are currently working to implement the recommendations that fall within our remit. legislation is being prepared to establish a national claims information database to be run by the central bank. we are assisting the department of finance in its development of this legislation. we will also be issuing a public consultation shortly on the extension of notice periods and information which must be provided by insurers to policy holders regarding renewal of policies. we remain committed to implementing the recommendations in the report, working with stakeholders in keeping with our mandate. it should be noted that in the area of the pricing of insurance, the central bank, in common with other eu supervisors, does not have a role in setting or capping premiums or renewal rates and is prohibited from doing so by eu law, specifically article 181 of the solvency ii directive. * * * macroprudential measures finally, the central bank ’ s role as ireland ’ s national macroprudential authority provides a further example of where our financial stability, prudential and consumer protection mandates intersect. 7 / 8 bis central bankers'speeches macroprudential policies are directed at limiting systemic financial risks, both through additional capital buffers for banks and borrower - based measures. we view our mortgage measures that put ceilings on loan - to - income ( lti ) and loan - to - value ( ltv ) ratios as essential to enhance the resilience of both borrowers and banks. the lti rule is intended to ensure that mortgage debt is not too high relative to a household ’ s income level, reducing the risks associated with excessive debt burdens. the ltv