certain amendments in the banking regulation act, 1949 have been proposed. iv. way forward 28. the changing landscape of the banking industry will unfold in the backdrop of a strong regulatory and supervisory regime with increased intensity and tech - enabled supervision of banks. the challenge before banks is to make the best use of technology and innovation to bring down intermediation costs while protecting their bottom lines. further, artificial intelligence ( ai ), machine learning ( ml ) and big data are becoming central to financial services innovation. they can also help in fraud detection and in identifying better ways of monitoring use of funds by borrowers, track suspicious transactions, etc. by processing large datasets. 29. one of the challenges for policy makers, especially in countries like india, is to ensure that new innovations in banking sector serve the customer by reducing the cost of financial services and enhancing the range and access to products in a manner that is safe. advanced analytics and real - time monitoring of emerging cybersecurity risks will be critical in detecting potential threats and enabling pre - emptive action. 30. as the indian banking sector is propelled forward to a higher orbit, banks would have to strive hard to remain relevant in the changed economic environment by reworking their business strategies, designing products with the customer in mind and focusing on improving the efficiency of their services. the possibilities are enormous. we should be seized of the issues and act in time. 1 arner, d. w., barberis, j., & buckley, r. p. ( 2015 ). the evolution of fintech : a new post - crisis paradigm. georgetown journal of international law, 47, 1271. 2 gupta, a., & xia, c. ( 2018 ). a paradigm shift in banking : unfolding asia ’ s fintech adventures '. banking and finance issues in emerging markets ( international symposia in economic theory and econometrics, volume 25 ). 3 www. rbi. org. in / scripts / publicationreportdetails. aspx? urlpage = & id = 946 4 bank for international settlements ( 2019 ), ‘ annual economic report ’, june. 6 / 6 bis central bankers'speeches

important banks ( d - sibs ) requirements ; and a supervisory framework for measuring and controlling large exposures. on the resolution front, some progress has been made in terms of the notification issued by the central government under section 227 of the ibc. we may, however, expect to have an integrated framework for resolution of financial firms operating in india in the near future. the implementation of this reform is of particular importance for having a resilient financial system in india. 8. in terms of recent progress, the indian banking sector is slowly turning around on the back of improvements in asset quality with enhanced resolutions through the insolvency and bankruptcy code ( ibc ). despite the recent decline in impaired assets and a significant improvement in provisioning, profitability of the banking sector remains fragile. capital position of banks has, however, improved on account of recapitalisation of public sector banks by the government and capital raising efforts by private sector banks. nevertheless, the sector continues to encounter challenges from events like those around the telecom sector. 9. consequently, the overhang of non - performing assets ( npas ) remains relatively high which is weighing on credit growth. also, in view of subdued profitability and deleveraging by certain corporates, risk - averse banks have shifted their focus away from large infrastructure and industrial loans towards retail loans. this diversification strategy, while helpful as a risk mitigation tool, has its own limitations. further, sector specific pockets of stress need policy attention. at the same time, proper due diligence and risk pricing in lending is of prime importance so that the health of the banking sector is not compromised while ensuring adequate flow of credit to productive sectors of the economy. 10. the banking stability indicator, as reported in rbi ’ s financial stability report of december 20193, shows an improvement. timely mitigation measures like faster resolution, better recovery, etc., need to be continued to bring down the gross non - performing assets ( gnpa ) ratios of all scheduled commercial banks ( scbs ). while lower rate of credit growth limits the size of the denominator for measuring gnpa, risks arising out of global and domestic economic conditions and geo - political developments persist. iii. new dimensions of banking emerging structure of banking 11. while global banking system is still in the process of addressing the gaps exposed by 2 / 6 bis central bankers'speeches global financial crisis, new issues have surfaced and challenged the very core of the