exploit the synergies across various dimensions. 8. the conceptual underpinnings of financial stability, as it evolved post - gfc, entailed preserving and nurturing a well - functioning financial architecture which includes not just the banks but also other financial institutions along with efficient and secure payment and settlement systems. recent experience across countries during the pandemic suggests that even though banks, non - banks, financial markets and payment systems remain at the core of financial stability issues, there is still a need to look much closer at the system in its entirety. in this sense, the overall objective of financial stability policies should be closely intertwined with the health of the real economy. more precisely, given that the financial system works as a pivot between various sectors of the economy and given the strong linkages across sectors, financial stability needs to be seen in a broader perspective and must include not just the stability of the financial system and monetary stability ( price stability ), but also fiscal sustainability and external sector viability. all these operate in a feedback loop ; and disturbances in any of the segments do get propagated to other segments with the potential of disrupting systemic stability. 9. when we look at financial stability from such a perspective, preserving and nurturing the same becomes a public good, which should facilitate creation and nurturing of congenial underlying conditions for sustained growth and development. in difficult circumstances, such as the current one, it is important that all stakeholders recognise and partake in their shared responsibility for the collective benefit of the society at large. history is replete with examples of such endeavours in response to difficult situations and that, in essence, has been the story of human progress and modern economies. ii. preserving financial stability during covid - 19 10. the idea of financial stability in this broader sense moulded the reserve bank ’ s approach during the pandemic, which was a unique crisis, more challenging than the global financial crisis of 2008, impacting both the real and financial sector in great severity. with conventional, unconventional and new tools, the reserve bank responded through a series of measures to alleviate stress in various segments of the economy and the financial sector, including the stress encountered by market players and financial entities. broadly speaking, our approach to the covid situation included the following measures : ( a ) measures to mitigate the immediate impact of the pandemic : loan moratoriums together with asset classification standstill ; easing of working capital financing and defer

towards a stable financial system nani palkhivala memorial lecture delivered by shri shaktikanta das, governor, reserve bank of india on saturday, january 16, 2021 at the outset, let me pay my homage to shri nani a. palkhiwala and his grand legacy as a nation builder of modern india. i would also like to convey my sincere appreciation to the palkhivala foundation for continuing the tradition of organising shri palkhivala memorial lectures. i consider it as a great honour to be delivering the 39th shri palkhivala memorial lecture today, more so – among others – because he was very closely associated with the rbi during his tenure as a member of the central board from 1963 to 1970. gleaning through the history of the rbi, i gather that he participated actively in discussions of the central board on important issues spanning bank nationalisation, external aid and development finance institutions. he invariably brought insightful perspective to the deliberations on various issues. shri palkhivala was a strong votary of enhancing competition in the banking sector and nurturing native entrepreneurial capabilities to spur economic progress. these issues continue to be relevant even in the present times. 2. the immensity of shri palkhivala ’ s life - long contributions to the indian society is well known. he was a gifted jurist who held the constitution, economic and individual freedoms in highest regard. his conduct and integrity during the epochal kesavananda bharti case and in many other cases underlined the strength of his character, profound intellect and a heart full of empathy for the citizens of this country. 3. shri palkivala was an orator par excellence, both inside and outside the courtroom. starting in 1958, his famous post - budget speeches are still remembered for their eloquence, intelligence and sharp wit. with growing audience every year, the venue of palkhivala ’ s speeches on budget kept getting shifted to bigger places. in 1983 when it was held in the brabourne stadium in mumbai, vijay merchant – the president of the cricket club of india – while welcoming the gathering had remarked1 “ mr. palkivala has brought the crowds back to the brabourne stadium ” since test matches had been shifted to the newly constructed wankhede stadium. 4. the topic of my lecture today is “ towards a stable financial system ”. the year bygone could be marked as one of the toughest periods for human society