of ownership has led to greater market accountability and improved efficiency. since the initiation of reforms, infusion of funds by the government into the public sector banks for the purpose of recapitalisation amounted, on a cumulative basis, to less than one per cent of india ’ s gdp, a figure much lower than that for many other countries. even after accounting for the reduction in the government's shareholding on account of losses set off, the current market value of the share capital of the government in public sector banks has increased manifold and as such what was perceived to be a bail - out of public sector banks by government seems to be turning out to be a profitable investment for the government. third, one of the major objectives of banking sector reforms has been to enhance efficiency and productivity through competition. guidelines have been laid down for establishment of new banks in the private sector and the foreign banks have been allowed more liberal entry. since 1993, twelve new private sector banks have been set up. as already mentioned, an element of private shareholding in public sector banks has been injected by enabling a reduction in the government shareholding in public sector banks to 51 per cent. as a major step towards enhancing competition in the banking sector, foreign direct investment in the private sector banks is now allowed up to 74 per cent, subject to conformity with the guidelines issued from time to time. fourth, consolidation in the banking sector has been another feature of the reform process. this also encompassed the development financial institutions ( dfis ), which have been providers of long - term finance while the distinction between short - term and long - term finance provider has increasingly become blurred over time. the complexities involved in harmonising the role and operations of the dfis were examined and the rbi enabled the reverse - merger of a large dfi with its commercial banking subsidiary which is a major initiative towards universal banking. recently, another large termlending institution has been converted into a bank. while guidelines for mergers between non - banking financial companies and banks were issued some time ago, guidelines for mergers between private sector banks have been issued a few days ago. the principles underlying these guidelines would be applicable, as appropriate, to the public sector banks also, subject to the provisions of the relevant legislation. fifth, impressive institutional and legal reforms have been undertaken in relation to the banking sector. in 1994, a board for financial supervision ( bfs ) was constituted comprising select members of the rbi board with a variety of professional expertise to exercise '

mario draghi : hearing at the committee on economic and monetary affairs of the european parliament introductory statement by mr mario draghi, president of the european central bank, before the hearing at the committee on economic and monetary affairs of the european parliament, brussels, 16 june 2015. * * * mr chairman, honourable members of the committee on economic and monetary affairs, ladies and gentlemen, i am happy to be back to this committee for my regular hearing. today, i would like to share with you the ecb ’ s assessment of the current economic and monetary conditions in the euro area. i will then touch on the subject chosen for our exchange of views, namely the risks and side - effects of our asset purchase programme. finally, i will say a few words about the current situation in greece. economic outlook and monetary policy the latest economic indicators and survey data broadly confirm our assessment that the economic recovery is proceeding at a moderate pace. while growth has been mainly supported by private consumption in recent quarters, we now see encouraging signs that also private investment is picking up, which underlies our expectation that the economic recovery should broaden. this will be supported in particular by our monetary policy measures, which are working their way through to the real economy, by the comparatively low price of oil, and by improvements in external price competitiveness. this is also reflected in the latest eurosystem staff projections : we project economic growth to increase from 1. 5 % of gdp in 2015 to 1. 9 % in 2016 and to 2. 0 % in 2017. after some months with negative or zero rates, inflation in may has increased modestly, standing at 0. 3 % in year - on - year terms, as the negative contributions from energy prices are fading. we expect inflation to remain low in the months ahead before rising stepwise around the turn of the year. thereafter, inflation is expected to gradually converge toward levels closer to but still below 2 %. in the eurosystem staff projections of june, inflation is projected to increase from 0. 3 % in 2015 to 1. 5 % in 2016 and 1. 8 % in 2017. over the last quarter, money and credit dynamics have strengthened overall. the growth of broad money in april stood at 5. 3 %, and in part reflects the expansion of bond purchases by the eurosystem. while improving further, loan growth to the private sector, standing at 0. 8 % in april, has lagged somewhat the pace at which monetary trends have been firm