farmers as compared to large farmers while sanctioning credit. banks 11 ) scalability of cbs platform : in order to handle the growing amount of work due to intensive financial inclusion efforts of country, banks / rrbs should ensure scalability of their cbs platforms. banks / rrbs 12 ) electronic benefit transfer ( ebt ) : the ebt scheme being an important and integral part of the overall financial inclusion with its attendant benefits, banks should promote ebt systems effectively for boosting their financial inclusion plans. banks 13 ) ultra small branches17 : ultra small branches may be set up between the base branch and bcs to provide support to about 8 - 10 bc units at a reasonable distance new private banks / rrbs low credit share of rural areas : although, in terms of number of branches, rural areas account for nearly 30 % of total branches of scheduled commercial banks, the share of rural credit account for less than 10 % of total credit. govt. / banks should initiate steps to increase the credit absorption capacity in rural areas by promoting employment and other opportunities. banks / goi private banks 15 ) private sector banks need to open more branches in rural areas : in the case of private sector banks, rural branches accounted for just 13. 3 % of their total branches in march 2013 ( while in the case of public sector the same stood at 33. 1 % ). there is an imperative need to ramp up the number of rural branches by the private sector banks penetration of rrbs in financially excluded regions : though rrbs have more presence in central ( 30. 7 % as on march 2012 ) and eastern regions ( 23. 1 % ), financial exclusion is more acute in these regions. rrbs 16 ) infrastructure development : for up - scaling financial inclusion, adequate infrastructure such as digital and physical connectivity, uninterrupted power supply etc are prerequisites. reportedly, out of six lakh villages in india, around 80, 000 villages have no electricity and the constraints of electricity directly impact the working of banks. central & state governments 14 ) 17 ) source : hand book of statistics on indian economy. rpcd co. rrb. no. bl. bc / 08 / 03. 05. 90 / 13 - 14. bis central bankers ’ speeches 18 ) vernacular languages financial inclusion efforts should necessarily be done in vernacular languages. in this context, the need for vernacularisation of all forms ( including legal forms ) is an absolute must, at least in major languages. as

barents sea and others deep into the fjords warmed by the gulf stream – that had in fact invested in instruments exposed to the us subprime market. they were told that they could earn a risk - free excess return of 50 basis points. the instruments were in most cases sold to them by their very small local savings banks, which had taken them on from large us investment banks. the savings banks did not understand the risks either! ignorance combined with greed – a dangerous combination. in 2008 and 2009 the municipalities suffered very large losses ; from risks they had not understood. welfare schemes had to be cut, schools closed and the pupils had to learn to swim in the cold fjords because the swimming pools were closed. the main argument used in favour of new and complex instruments is that they facilitate risk sharing across economic agents. but risks that are not understood can hardly be shared in any optimal way. it is also important to keep in mind that risk sharing can also be promoted through simpler and more conventional instruments. bis central bankers ’ speeches our oil fund – managed by norges bank and with more than 500 billion dollars under management – set up a special instrument committee after the recent financial crisis. the committee must sanction every financial instrument before it can be used for investments. as a result, the number of instruments available to the fund ’ s managers has been significantly reduced, in particular fixed - income and derivatives instruments, since the committee was established. one factor behind the financial crisis was a very important market distortion described by hyman minsky : the interaction between asset prices and credit volumes may create a spiral where both asset prices and credit rise to unsustainable levels. the use of financial innovations to create more credit with the result that it fuels such a spiral is clearly not a socially desirable use. adair turner of the british fsa1 has pointed out that credit and asset bubbles also represent a massive misallocation of capital in the real economy. speech by adair tuner on 29 september 2011, credit creation and social optimality. bis central bankers ’ speeches one key answer to the spiral described by minsky has been to introduce macroprudential regulation. instruments such as the countercyclical capital buffer are meant to provide a cushion when the credit cycle turns down. there is also a commonly held view that we need instruments to dampen credit growth during an expansion. we should probably look broadly at how the minsky style spirals could be contained. discretionary policy can be a