tier ii and tier iii capital, ceiling on interest rate spread at the time of issue of the subordinated instruments was removed effective from april 1, 2009. ii. stand - alone pds were allowed to categorize a portion of their government security portfolio in the htm category till march 31, 2010. iii. in order to aid stand - alone pds in managing their funding requirement, pds are allowed to borrow from call money market, on an average in a fortnight, up to 225 per cent up from 200 per cent. iv. in the backdrop of global financial crisis and the need to have strongly capitalized entities to ensure financial stability, the minimum nof for stand - alone pds undertaking only g - sec business, was increased from rs. 50 crore to rs. 150 crore and for the stand - alone pds, which intend to undertake other permissible activities, nof is enhanced to rs. 250 crore from the existing level of rs. 100 crore. the enhanced level of nof requirement shall be effective from april 1, 2010. v. pds are allowed to deal in interest rate futures ( irfs ) for both hedging and trading on own account. 45. the rbi is impressing upon the pds to expand their outreach to widen the investor base for government securities and act as market makers for the smaller entities in noninstitutional segment. corporate bond market 46. corporate bond market segment has received intense attention in recent times as it has been identified as one of the growth engines for further development of the indian economy with vast infrastructure needs. a well developed corporate bond market not only enables the corporates to tap the markets for their financing needs and result in efficient allocation of resources but also acts as a much desired supplement for the bank financing thereby reducing the systemic stress. there has been a spurt in the secondary market activity in the corporate bond markets. the secondary market volumes have gone up from rs. 5000 crore in 2007 to about rs. 30, 000 crore in 2009. the bond issuance through private placement in the first half of 2009 – 10 has shown an increase of 25 per cent over the corresponding period previous year, with financial service sector accounting for 71 per cent of the mobilization. the fiis have been allowed to invest up to $ 15 bn in corporate bonds. the actual utilization is however very low. the streamlining of clearing and settlement processes by mandating the dvp settlement of corporate bonds is expected to increase the

paradigm of fin - tech and to chart out the best way of using it. 5. technology has thrown several gauntlets simultaneously on to the banking and financial sectors in recent times. i would like to highlight five of them. 6. first is the cyber security. banks deal with hard cash and money and therefore have always been targets of crime ; while the banks make good use of it for protecting cash and money, ironically use of it by criminals have also increased substantially. today, it systems of banks are the prime target for cyber crimes and if one were to judge by the volume and value of incidents, the menace is steadily growing. it is of great concern – some of the recent incidents at bangladesh bank and several persistent instances in many banks are just the proverbial tip of the iceberg. if we need to provide safe and secure banking, then providing for safe it systems is an undeniable requirement. it is essential that in every it based initiative, security is addressed as a vital component. banks need to bestow greater attention on cyber security. the role of the chief information security officer ( ciso ) assumes great significance. it is heartening to note that all banks have a well anointed set up in the ciso. as i mentioned earlier, criminals have become it savvy ; cyber attacks are becoming highly sophisticated, use specialized analytical techniques and exploit minute vulnerabilities which had hitherto gone unnoticed. continued vigilance and concerted bis central bankers ’ speeches proactive protective actions are warranted. we have a ciso forum under the aegis of the idrbt ; this forum, along with the ongoing research in idrbt in cyber security should help banks exchange information, react quick enough to outsmart the perpetrators of cyber incidents and build in workable security related enhancements. 7. second are the new technologies that are fast developing. one of the important characteristics of the it world is that it is ever changing and dynamic. cloud based computing, block chain processing technologies and virtualization of it systems are a few examples which hold potential for being used in a big way. the fruits of these would be in the form of safe, trackable and secure digital currency, distributed ledger - keeping and homogenous it systems – all of which would ultimately result in better customer service. banks and idrbt can work together to study these, test them out and adapt for best use. 8. third are the fin tech companies – the new,