health cover. cooperative banks and regional rural banks being local level institutions are well suited for achieving financial inclusion. these banks are being revived and strengthened with incentives for better governance. being local institutions they are ideally suited for achieving fi. the role of an efficient payments system for fi cannot be overstressed and we efforts are being made to bring about improvements in the payments system especially in the relatively less developed parts of the country. huge increase in no frills accounts the outcome of the efforts made is reflected in the increase of 6 million new “ no frills ” bank accounts opened between march 2006 and 2007. in view of their vast branch network ( 45000 rural and semi urban branches ) public sector banks and the regional rural banks have been able to scale up their efforts by merely leveraging on the existing capacity. fi is being viewed by these banks as a huge business opportunity in an overall environment that facilitates enterprise and growth. it provides them a competitive advantage and defines a clear niche for their growth. use of intermediaries one of the ways in which access to formal banking services has been provided very successfully since the early 90s is through the linkage of self help groups ( shgs ) with banks. shgs are groups of usually women who get together and pool their savings and give loans to members. usually there is a ngo that promotes and nurture these groups. national bank for agriculture and rural development has played a very significant role in supporting group formation, linking them with banks as also promoting best practices. the shg is given loan against guarantee of group members. the recovery experience has been very good and there are currently 2. 6 million shgs linked to banks touching nearly 40 million households through its members. banks provide credit to such groups at reasonable rates of interest. however the size of loans is quite small and used mostly for consumption smoothening or very small businesses. in some shgs, credit is provided for agricultural activities and other livelihoods and could be several times the deposits made by the shg. most of the shgs have been linked to public sector banks in view of the latter ’ s dominant presence in the rural areas. the foreign banks and private sector banks have approached the access issue through either setting up relatively lower cost non bank companies for providing small value retail loans or have partnered with micro finance institutions that provide financial services to the relatively higher risk segments of the population. microfinance has drawn attention to an entire sector of borrowers who had been previously poorly served by the formal

mario draghi : overview of economic and financial developments in italy concluding remarks by mr mario draghi, governor of the bank of italy, at the ordinary general meeting of shareholders, rome, 31 may 2006. * * * ladies and gentlemen, as i take the floor for the first time before this annual meeting, allow me to begin by conveying my best wishes to the president of the republic, giorgio napolitano, to whom i confirm the continuing institutional commitment of the bank of italy to serving the nation. in the same spirit of invaluable institutional continuity, i pay my respects to the government that led italy for the duration of a legislature and wish the government that has just taken its place success in its endeavours. in december of last year antonio fazio resigned as governor of the bank of italy. he had joined the bank in 1965, become head of the research department and then central manager for economic research. as governor since may 1993, he directed the monetary policy that accompanied italy ’ s entry to economic and monetary union. his actions towards the end of his tenure are still open to judgement. to him i wish to express recognition that is not merely formal for having dedicated his entire professional life to the service of this institution. the end of last year brought with it the conclusion of a convulsive period of scandal and speculation, during which it had seemed that the market, the savings of italians, and the destiny of companies in key sectors of the national economy were prey to the caprice, self - interest and schemes of a few individuals. the action of the judiciary prevented these schemes from succeeding. the outcome of the judicial proceedings now under way is awaited. although the institutional integrity of its supervisory structure was unscathed, the bank of italy has been wounded. as president carlo azeglio ciampi did me the honour of appointing me governor, on the proposal of prime minister silvio berlusconi, it was and it is my responsibility to lead the bank in the restoration of the prestige it has always enjoyed, and to guide its evolution in a national and international environment radically different from the one that has shaped its history. the field of action is vast : contributing substantively to the formulation and implementation of monetary policy in the euro area ; expanding and strengthening banking supervision while adapting it to the new international rules ; making the bank once again the trusted, independent advisor to parliament, the government and the general public ; and, internally, reconfiguring the central