sme sector, banking institutions should explore other potential growth areas such as microcredit and agro - based financing, which are generally perceived as riskier and more costly than lending to larger firms. the challenge is for banking institutions to innovate and develop new form of financing arrangements and business models to exploit the opportunities offered by these market sectors. strategic opportunities are also available from a larger marketplace as economic integration and regional linkages of markets in the east asian region gather pace, driven by increasing regional trades and investment flows. in this regard, banking institutions should broaden their strategic outlook and expand their presence in the region to support malaysian businesses and investors as they venture into new activities and expand their geographical profiles. another strategic challenge facing banking institutions today is the growing and changing needs and expectations of consumers in tandem with increased education levels and growing wealth. consumers are becoming increasingly discerning and have become more involved in their financial decisions. for this reason, they are demanding a broader range of products and services at more competitive prices through more efficient and convenient channels. corporate customers have also become more performance - oriented and are demanding both competitively priced credit facilities and world - class financial advisory services. in this environment, the challenge is for banking institutions to anticipate and respond quickly to the differentiated demands and expectations of customers to sustain their competitive advantage. with growing customer expectations for continuous availability of services, the ability to continue to provide critical banking services at all times will also be crucial in the pursuit of building and maintaining their competitive edge. in conjunction with this, banking institutions must be able to quickly recover mission critical functions and assets during a major interruption to ensure efficient and reliable services to their customers. technological advancement, which has increased the complexity of banking business and which has led to the emergence of increasingly innovative products and distribution channels, also presents opportunities for the banking sector. with ict, financial services are being delivered to places and markets without requiring physical branch networks through a growing array of alternative delivery channels, including internet, atms, and even mobile phones. the challenge to banking institutions is to effectively leverage on the opportunities offered by technology to innovate products and services aimed at attaining greater efficiency, reliability and competitiveness. while the efficiency of electronic means of doing banking is acknowledged, banking institutions should recognise the need for them to meet customer expectations for more personalised and quality services. additionally, the potential benefits from electronic delivery channels need to be exploited without undermining the security and confidence of the banking public. the

to seamlessly integrate whatever technology they choose, with their cbs architecture. we have advised banks to adopt innovative business models and delivery channels to expand their fi efforts. there is a need for banks to develop new products and design new delivery models that are customized to the unique needs of the financially excluded population, both in the rural and urban areas. considering that financial literacy is an important adjunct for promoting financial inclusion, consumer protection and ultimately financial stability, rbi has adopted an integrated approach wherein efforts towards financial inclusion and financial literacy would go hand in hand. besides the various initiatives taken by rbi individually to encourage financial literacy, a national strategy for financial education ( nsfe ) has also been finalized under the aegis of the financial stability and development council ( fsdc ) to co - ordinate efforts of various stakeholders involved in this process. the reserve bank has been playing a supportive role in fi by creating a conducive regulatory environment and providing institutional support to banks in their fi efforts. importantly, we have provided banks the freedom and the space to determine their own strategies for rolling out fi and have encouraged them to identify their own goals and targets through their respective financial inclusion plans. robust institutional mechanism 11. our strength lies in the fact that we have created a robust institutional mechanism to support the roll out of banking services across the country. this was essential considering the enormity of the task in terms of the number of excluded people and the geographical size of the country. bis central bankers ’ speeches india is one country where the fsdc has a specific mandate for financial inclusion and financial literacy. there is a separate technical group on financial inclusion and financial literacy under the aegis of fsdc with representation from all the financial sector regulators. in order to spearhead efforts towards greater financial inclusion, rbi has constituted a financial inclusion advisory committee ( fiac ) under the chairmanship of a deputy governor from rbi. the fiac has few directors from the central board of rbi and experts drawn from ngo sector / other civil society representatives, etc. as members. the collective expertise and experience of the members is expected to be leveraged to explore issues such as developing viable and sustainable banking services delivery models focusing on accessible and affordable financial services, developing products and processes for rural as well as urban unbanked consumers. at the state level, we have state level bankers committees ( slbc ) in all the states. going further down, we have lead district managers in all the 659 districts, with recent inclusion of