inadequate. as the government has to play an important role in ensuring primary education and health care as well as supporting secondary and tertiary education, there is a need to prioritise resources on these heads as these have strong externalities. • keeping in view the burden of human resource development on the state and its reduced capacity to generate required resources, there is greater need for public - private partnership in expanding the facilities for augmenting critical mass of skilled workforce to respond to increasing demand to adapt to new technology in all areas of production whether industry or agriculture. as the distinguished participants present here are aware that in the reserve bank of india ( rbi ) we have engaged ourselves in areas relating to monetary management, banking regulation and supervision, technological advancements both within the bank and the industry with a view to facilitating economic growth with stability. the rbi has sound human resources practices aimed at building a competent and highly motivated human capital base. the selection and placement processes are aimed at identifying the right persons for right positions. officers are provided training opportunities after due assessment of their needs in the training institutions of the bank as well as external ones. while these measures have helped in selection and development of quality human resources, the clean work ethos and the positive approach of the bank ’ s management towards its people has really been responsible in building a workforce, which is capable of adapting to changes and meeting challenges and of working as a cohesive group and team. we have attached high priority to the governance aspects to cope with the rapidly changing scenario. the quality of human resource indicates that the ability of rbi to deliver value to customers. as governor rbi dr. bimal jalan has mentioned in one of his speeches “ capital and technology are replicable but not human capital which needs to be viewed as a valuable resource for the achievement of competitive advantage. ” the introduction of computerisation paved way for the customers of the bank and the public at large to receive better service from the bank. it is truly a matter of pride for me to have been associated with the reserve bank of india and its competent, quality human resource.

we need to begin a vigorous campaign to educate the society about the myth of investment in gold as a “ safe asset ” and a “ hedge against inflation. ” i believe that the indian banking sector cannot be propelled into the next orbit unless all its stakeholders and the society as a whole, has attained basic financial literacy. improving efficiency 24. what are the attributes of an efficient financial system? to my mind, efficiency of any system may be gauged in terms of its ability to not only deliver products and services in a cost - effective and affordable way, but also in an inclusive manner. neither of these two traits characterizes our present banking and financial system. a wide section of the population remains excluded from the formal financial system even years after “ growth with a human face ” has been the cliched socio - political agenda of the policy makers. moreover, the operating cost of banking system remains at an elevated level which renders the banking transaction costs unaffordable for the common man. the dream of financial inclusion cannot be realized unless the banking transaction costs are brought down substantially. this would need a collective effort from the policy makers, bank managements, regulator and the employees. effective use of the new factors alluded to above - skills, technology and human capital - would help in increasing the productivity and, thereby, lowering the transaction costs. for the realization of this dream, the banking system would need to acquire allocational and operational efficiency : • allocational efficiency : this requires banks to ensure that the precious societal resources are allotted to the most productive activities and that the interests of the vulnerable sections of the society are also taken into account. • operational efficiency : operational efficiency requires banks to provide financial products and services to its customers in a safe, secure and speedy manner and to ensure that the cost of financial intermediation is minimized. bis central bankers ’ speeches 25. as you all gain knowledge and exposure through this advanced management programme, i expect you to deliberate and introspect on how your banks and the banking system as a whole can improve on both - allocational and operational efficiency parametersso that the financial intermediation function is efficiently performed. you must realize that banks would need to “ perform or perish. ” this will be an important takeaway for all of you from the programme and will determine whether banks can, indeed, regain the trust and confidence of the common man on the street and retain their pivotal position in the emerging financial order. challenges before regulator / supervisor 26. though