s s mundra : indian banking sector – emerging challenges and way forward lecture by mr s s mundra, deputy governor of the reserve bank of india, as part of the memorial lecture series launched by state bank of mysore in the memory of his highness sri nalwadi krishnaraja wadiyar, bangalore, 29 april 2015. * * * 1. shri sharad sharma, managing director, state bank of mysore ; shri karthak, regional director for karnataka, rbi ; senior colleagues from the banking fraternity ; ladies and gentlemen! it is a privilege for me to deliver the inaugural memorial lecture in the honour of his highness sri nalwadi krishnaraja wadiyar, former maharaja of mysore. it is quite apt that a memorial lecture has been instituted by state bank of mysore in the honour of sri krishnaraja wadiyar. the prophetic maharaja of mysore, during his lifetime, had earned sobriquets of being a philosopher - king and a ‘ rajarshi ’ or a “ saintly king ” from no less a person than the father of the nation. it is a glowing testimony of his popularity and prowess that mysore in his times was regarded as “ the best administered state in the world ”. as lord sankey noted “ princes from other sections of india were sent to mysore for administrative training ” and hence, holding this memorial lecture at this newly opened learning centre holds an added significance. during his reign, maharaja wadiyar worked towards social causes like poverty alleviation and economic regeneration by improving rural reconstruction, public health, industry and education ; some of the goals that the policy makers are presently pursuing with support from the banking sector. 2. the banks are the lifelines of the economy and play a catalytic role in activating and sustaining economic growth, especially, in developing countries and india is no exception. our banking system, at the present juncture is, however, facing significant challenges from several quarters. these challenges, if not addressed quickly and adequately, may result in loss of opportunities as and when the economic growth starts picking up momentum. in a sense, it has implications for both - the banks as well as for the economy as a whole, because as i mentioned earlier, a strong banking system is one of the essential prerequisites in the quest for growth. in my lecture today, i intend to focus on the economic landscape and the emerging challenges for the banking system at the current juncture. macroeconomic landscape 3. since the onset of the financial

and should not be seen as an end in itself. side by side, we need to develop strong partnerships so that country ownership is assured. further work is also required in order to enhance the voice and participation of developing and transition countries in the multilateral institutions. while we appreciate that there are no quick fixes, we would stress that on - going dialogue and efforts to evolve solutions that better reflect changed realities is the way forward. together, we would work towards improving the environment where we see the benefits of economic growth percolating to those who have been hitherto denied and to those who have suffered painful adjustments. there is no single mantra that would work everywhere and our policies should recognize this. but, if we are able to develop a real partnership, with each nation allowed to exploit its comparative advantage, and not be held back by artificial barriers and constraints, there is no reason why we will not succeed.