transactions. they are in a position to take a strategic or longer - term view of the comparative or competitive advantage of their individual banks as well – 8 – as identify areas of portfolio weaknesses and the costs / benefits of various kinds of services and products offered by them. they also have the opportunity to study from their vantage point and from a practical angle the working of the financial system and various improvements needed to strengthen the financial intermediation function. however, for bank economists to be able to perform these functions, it seems that some reorientation of the role that is assigned to them is necessary. there is also a need for some “ attitudinal ” change on the part of economists themselves. those who work in the commercial banking sector have to be prepared to accept operational responsibility, to work in the field, and to familiarise themselves fully with the commercial aspects of their bank ’ s work. their work has to be operationally relevant, and it must contribute to the financial soundness of bank ’ s operations. this is possible if bank economists also have branch - level experience and experience of working in non - economic departments with line responsibility. at present, the role of economists in our banking sector seems to be too narrowly defined. they are viewed as keepers of data, particularly macroeconomic data, and undertake periodic review or analysis of macroeconomic trends in the economy. they are seldom involved in undertaking any operational work or in developing strategic policy choices or even in treasury or foreign exchange functions. all over the world, with deregulation and globalisation of the financial sector, the role of economists in the banking sector has been changing and becoming more and more focussed on the analysis and valuation of the risk associated with various alternatives, particularly in emerging economies that are subject to greater volatility in the financial sector. in india, however, the role of economists has been somewhat slow in changing. it may perhaps be useful for this conference to initiate a process of discussion on the various issues and to reassess the role that members of this distinguished body can play in pushing forward the process of reform in our country. the challenges ahead are gigantic, but they are also exciting. given the determination, i have no doubt that india can have one of the most vibrant financial systems in the world. i would like to acknowledge with thanks the help of shri m. s. mohanty and shri partha ray of the reserve bank of india in the preparation of this lecture. * * *

. issue to contemplate is whether this can be done in a short term or even in the medium term. 9. then would it be fair to assume that a combination of above two would be a more realistic goal to pursue for quite some time to come considering the dimension of the work involved? would it also be fair to assume that pursuing only one of the above or even both but with varying emphasis would not serve the purpose? 10. leaving this broader issue for wider discussion, let me now turn to the various initiatives taken in past few years in respect of poverty alleviation / financial inclusion / employment generation etc. priority sector lending 11. efforts are also underway to reorient the priority sector lending guidelines to serve today ’ s growth and inclusion agenda. an internal working group at rbi has revisited the existing guidelines and suggested revisions for ensuring channeling credit to segments that get crowded out in the absence of specific targets. these include small and marginal farmers, micro enterprises and the weaker sections while broadening the scope to include other underserved categories of national priority, such as agriculture infrastructure, social infrastructure, renewable energy, exports and medium sized enterprises. financial inclusion plan 12. let me briefly highlight what rbi has been doing for mainstreaming the marginalized sections of the society and for ensuring an equitable growth in the country. rbi has been relentless in its pursuit of achieving universal financial inclusion by following a structured and planned approach. as i mentioned earlier, the focus is not only on ensuring access to financial services and products but also taking efforts to address issues emanating from the demand side through financial literacy initiatives. phase ii of the financial inclusion plan is currently under operation which seeks to connect all the 600, 000 plus villages in the country to banks either through a brick and mortar branch or a bc agent by the end of the year. pmjdy 13. to say that government ’ s pmjdy scheme has been a success would be a massive understatement. one must admire the vision and intent behind the program. lot of efforts bis central bankers ’ speeches has gone into opening the bank accounts and most households have been connected to the formal financial system. the need of the hour now is to ensure that services are easily accessible to the account holders, are cost - effective and service efficient & most importantly the accounts remain active. for the account to remain active, the holders would need income and benefits to flow into them. focus should also be placed on inculcating savings habit among the