players involved, more complex the process to address customer grievances within the shortest span of time. as a result, either customer complaints take a long time to resolve or remain unresolved, both of which situations needs to addressed in right earnest. some criticism 36. we have been ahead of many countries world - wide, including even advanced countries, in the introduction of many efficiencies and safeguards in payment systems. two factor authentication is a good example. the recent upi, ussd and nuup are further examples. similar measures are being introduced by these countries now and we are being asked to share our experiences increasingly in international forums. 37. despite this, we are said to be over - protective in some aspects as a payments system regulator. we are asked as to why there is a regulatory arbitrage in favour of banks and why nonbank entities cannot be given an equal footing in terms of access as well as activities they are permitted to undertake. there is a feeling that opening up the system to private players will bring in the payments revolution faster, similar to the telecom revolution which happened with the opening up of the sector to private players and giving a level playing field to all entities. 38. let me first answer why there is primacy for banks in payment systems. as i mentioned right in the beginning, payments can be effected only in either of two ways – one you use cash to make payments and the other you transfer money in your bank account. there is no third method. thus for the non - cash payments, the origination and ending places are banks only. therefore, minus the banks, there is no non - cash payment instrument or system. critics do not seem to have understood this. 39. as regards the opening up of access to various systems and activities for non - bank entities, we have been opening up the space and gradually allowing entry to non - bank entities. at origination, in between originating bank and destination bank and at the receiving end, there is no restriction for a non - bank entity to be present. examples include the ppi issuers, bbps operating units, treds, wlas, payment aggregators, etc. 40. critics ask why a non - bank cannot be allowed to keep bank accounts. they quote the success of mpesa, a non - bank entity in kenya in ushering payment revolution in that country. our answer is simple. if you maintain a bank account, then you are a bank and you

market funds was a step in the right direction, but the combination of fixed net asset value, the lack of loss absorption capacity, and the demonstrated propensity for institutional investors to run together make clear that chairman schapiro is right to call for additional measures. as to the tri - party repo market, there are several important concerns. a major vulnerability lies in the large amount of intraday credit extended by clearing banks on a daily basis. an industry initiative to address the issue led to some important operational improvements to the tri - party market, but, to be frank, fell short of dealing comprehensively with this problem. so it now falls to the regulatory agencies to take appropriate regulatory and supervisory measures to mitigate these and other risks. conclusion it is sobering to recognize that, more than four years after the failure of bear stearns began the acute phase of the financial crisis, so much remains to be done – in implementing reforms that have already been developed, in modifying or supplementing these reforms as needed, and in fashioning a reform program to address shadow banking concerns. for some time my concern has been that the momentum generated during the crisis will wane or be redirected to other issues before reforms have been completed. as you can tell from my remarks today, this remains a very real concern. still, i would like to conclude on a somewhat different – though i think not inconsistent – note. almost by definition, prudential reforms are injunctions to firms or markets about what they should not do. even affirmatively stated requirements to maintain specified capital ratios can be understood as prohibitions upon extending more credit, purchasing another instrument, or distributing a dividend unless the minimum ratio would be maintained. prohibition and constraint are quite appropriately at the center of a regulatory system. yet the policies that underlie regulation should embody a more affirmative set of social goals. one obvious example is the housing market, which remains depressed today, although there are at last some signs of gradual improvement. as has been widely observed, mortgages are not available to many potential homebuyers who appear creditworthy by most reasonable measures, despite the fact that home affordability judged by traditional measures is greater than at any time in decades. the flawed mortgage securitization system that provided too much financing on too lax terms has been eliminated or constrained. and important steps have been taken to protect consumers from unfair and deceptive practices seen in the last decade. bis central bankers ’ speeches but having addressed