nbfcs need to be careful in relying solely on pre - set algorithms as assumptions based on which the models are operated. these models should be robust and tested and re - tested periodically. they may require to be calibrated and re - calibrated from time to time based on the changing contours of the financial ecosystem and fresh information. it is necessary to be watchful of any undue risk build up in the system due to information gaps in these models, which may cause dilution of underwriting standards. concluding observations we are living in highly uncertain times in an interconnected world. new risks are emerging from time to time. new sources of risk are also coming up. in such a scenario, building up further on resilience would be the best insurance against shocks and uncertainties. this holds good for all businesses and financial entities. as i see many banking and corporate leaders in the audience, let me also stress that new opportunities are knocking at our doors. it is for us to capitalise on them. there has to greater focus on investment in capacity building, skilling of human resources and adoption of newer technology by all players. the international confidence on india's prospects is at a new high ; it is an opportune time to make this india's moment and work towards strong, sustainable and inclusive growth. thank you, namaskar! 5 / 6 bis - central bankers'speeches 1 federation of indian chambers of commerce and industry ( ficci ) and indian banks association ( iba ). 2 mooring of household inflation expectations has been underway since september 2022. inflation expectations for three months ahead fell by 90 bps from 10. 0 per cent ( july 2023 round ) to 9. 1 per cent ( september 2023 round ) and by 40 bps for one year ahead from 10. 3 per cent ( july 2023 round ) to 9. 9 per cent ( september 2023 round ). 3 the capital and liquidity requirements in india are uniformly applied to all the scheduled commercial banks, irrespective of their asset size and exposure. investment fluctuation reserves ( ifr ) have also been created in the banks. valuation guidelines on available for sale ( afs ) category of investment are stringent and follow a conservative approach. 4 as of november 20, 2023, the inr had depreciated ( on calendar year basis ) by 0. 7 per cent against the dollar, performing well when compared to its

infrastructure banks, about which the reserve bank in the recent monetary policy statement expressed its intention to usher in such differentiated banks in the coming times. 28. the advantage of being a differentiated bank is that its capital can be conserved and put to its best use. it can leverage its core strength, in a focussed manner. conclusion 29. let me conclude by saying that there is tremendous scope for consolidation among psbs. consolidation will bring efficiency and synergy of operations and will ensure that indian banking sector is capable of meeting credit demand of our growing economy. however, the consolidation needs to be a well - calibrated process based on sound economic logic. a hasty top - down approach which does not adequately consider synergies in the business models and compatibility in the business cultures and technology platforms of the merging banks may not be sustainable in the long run. and, finally, consolidation does not mean only merger of banks ; consolidation also means focussing on chosen businesses only. 30. thank you very much for your patient attention. bis central bankers ’ speeches