##scuring the assessment of risks, with attendant uncertainty. given the flux associated with both the financial markets and the monetary policy settings globally, india cannot be immune to these developments. the policy challenge for the reserve bank, now, is to manage the current transition to a higher growth path while containing inflationary pressures and focusing on financial stability. contextually, we in the reserve bank are, therefore, maintaining enhanced vigilance to be able to respond appropriately to the prevailing heightened uncertainties in global financial as well as monetary conditions. we expect to provide a detailed assessment of the evolving macroeconomic conditions as part of the mid - term review of the annual policy due to be released on october 30, 2007. the technical advisory committee on monetary policy is meeting on october 25, 2007, which will, as usual, provide valuable guidance for the review. iii. medium term : challenges and prospects for a large and diverse economy like india, with a low per capita income that is undergoing structural transformation in a highly uncertain global environment, challenges for public policy are manifold. i would like to focus on a few challenges that have been articulated in the latest annual report of the reserve bank of india – a document that reflects the views of the distinguished members of our board of directors on the subject. first, the recent upward trends in global prices of major food items have significant implications for the domestic agricultural sector and overall macroeconomic and financial stability. although the share of agriculture in overall gdp has declined over the years from around 38 per cent in 1980 - 81 to less than 20 per cent in 2006 - 07, agriculture continues to play an important role in the indian economy. the proportion of the population dependent upon agriculture remains large at almost 60 per cent. since the mid - 1990s, however, the growth of the agricultural sector has been low as well as volatile. volatility in agricultural production has implications not only for overall growth but also, as the experience of 2006 - 07 amply demonstrated, for maintaining low and stable inflation. thus, enhanced growth of the agricultural sector is vital for ensuring food security, poverty alleviation, price stability, overall inclusive growth and sustainability of growth of the overall economy. in view of significant weather and price risks, appropriate risk mitigation policies would need to be put in place to provide relief to distressed farmers as well as enhance the efficiency of production. in view of small and fragmented farm holdings, the population dependent upon agricultural activity will have to increasingly rely on non - farm sources of income in

##zing such grievances. banks and rbi alike have established help desks, may i help you counters, grievance redressal cells and citizen ’ s charters to disseminate information with that objective in mind. thus, the point is that compliance and customer service have to co - exist, strike a balance with each other and iron out inconsistencies in application so that the larger good of customers results, aided and abetted by able customer communication. customer protection and compliance customer protection is the basic premise on which most regulations focus. all financial operations have an underlying requirement of ensuring customer protection, and in the process, where necessary, co - operating with civil and criminal authorities when customer grievances result in litigation and instituting quick and effective compensation practices for customers who have incurred losses on account of negligence on part of banks / frauds etc. it is this sense of caution and precaution that has increasingly found a voice in rbi ’ s regulatory and supervisory guidance to banks for optimum use of technology to advise customers to not fall prey to fictitious offers for cheap funds, prevent on - line frauds and scams, advocate judicious use of debit, credit and atm cards, not compromising security features such as passwords with a view to prevent phishing mishaps and deploy an adequate risk based transaction mechanism to serve the best interests of customers. banks also hugely benefit by adopting such precautionary steps. while some of these regulatory and supervisory missives may be a tad too repetitive, it must also be understood that they are a re - iteration of rbi ’ s concerns to address operational risk in banks, prevent escalation of legal risk in the form of disputes and litigation and enhance confidence of customers in banks in the long run. where stricter rigors of compliance harp on safety and security of the customer, there would possibly be no harm done if the customer is displeased to some extent. is complaint handling an art or science? can dictates be employed in such art or science? complaint handling, by itself is a complex art requiring references from customers being identified as grievances or requests for information. once the reference has been slotted as a grievance, all efforts should be undertaken for prompt and satisfactory redressal. handling customers adequately as well as creditably requires more than banking and technical knowledge. it requires humanitarian and human resource skills which can be accentuated and enhanced with training initiatives. here, i would