the new... ” as tennyson intoned in la morte d ’ arthur, and with foresight warned : “ lest one good custom should corrupt the world. ” there was once a time when we spoke of the promise of a stable state and an end to poverty. even development economics followed a set of well - established principles ; and 163 / 2009 banking never hit the headlines. now banking seems daily to be front page news. and over the last fortnight we at the bank of mauritius are contributing our fair bit as well. you know i ’ m not really one for conspiracy theories. but last year, when they made another james bond film, i was reminded of the advice of goldfinger to bond, in that eponymous thriller : “ mr bond, they have a saying in chicago – once is happenstance ; twice is co - incidence ; the third time it ’ s enemy action. ” obviously, we must not become paranoid and see enemies and conspirators everywhere. but, maybe we bankers here should be heeding such advice, don our flak jackets and reexamine, with our economic partners, what banking is about, and what its future role should be in the real world. what exactly is the business we are in? i think the crisis has given some useful pointers. as bankers, we are not in the business of making money : that is where we have gone astray, giving too much latitude to the young man in barings, or the young man in societe generale, or the army of bonus - seekers playing hard and fast with other peoples ’ money like leeson and kerviel. the business of banking is business. it is doing business with you, the operators in the real economy, to promote more business, and through that to secure economic and social welfare and sustainable development. the money is not an end in itself. the bottom line matters … but so does the top line. that is why i have been keen to explore another model here which brings the money closer to the action in the real economy – islamic banking. some of you may know i was not here last week. a pity, because they tell me there was a bit of street theatre that i missed. last week, i was away in the gulf states, as for some time i have been concerned that the champion we were counting on to support our move in islamic banking, dubai, was looking a bit wobbly and weak at the knees.

practices in the banks concerned and a lack of computerbased systems for screening for fraud. in particular, the rbi report was critical of the high proportion of large transactions in cash handled by the banks for these companies without this alerting them to the fraudulent activities. in addition, there had been strange events involving alterations in the status of the directors of the fraudulent companies, changes in bis central bankers ’ speeches company names which the banks had ignored, and no checks had been made on whether the companies had appropriate licences for the activities in which they were involved. the rbi report in its recommendations called for extension of the powers of the bank in line with those of the financial services commission under the financial services act of 2007. this would allow it to take legal proceeding against such fraudsters and to freeze their assets. the rbi report considered that “ the quantum of financial penalties imposed by bom on banks is paltry and does not provide effective deterrence. there is a need to substantially increase the same. moreover, imposition of these penalties also should be disclosed in the public domain. ” part of the radical improvement we are introducing is that the bank has made it mandatory for all financial institutions to put in place an internal whistleblowing policy. financial institutions have a special position of trust in the national economy, and employees working with them have an individual and collective responsibility regarding their conduct and practices. we believe that there should be a proper framework in place for people to report any irregularities or unethical practices within financial institutions where they work, without fear of recrimination. we have also extended our programme of customer education, our checks on hiring employees, and their in - service training to prevent ponzi schemes going undetected in the future. in addition, the bank has set up a market intelligence cell which has been mandated to collect information from formal and informal sources to help detect any existing or potential financial crime and fraud, and carry out investigations. in the wake of the ponzi scams and financial frauds, proposals were made to amend the existing memorandum of understanding between bank of mauritius and the financial services commission to include a framework for handling exigencies, such as the ponzi scams. we expect amendments to be agreed and implemented in 2014. could these frauds have been prevented? there is no easy answer to this question. however, lessons have been learnt. i believe that one key way of preventing the recurrence of ponzi schemes is through financial literacy programmes