been given the discretion to pay dividend without the prior approval of the rbi. in view of the ongoing shift towards financing borrowers based on estimated cash flows rather than on collateral and in recognition of the availability of financial assistance through credit substitutes, viz., commercial paper, bonds and debentures, the restriction on unsecured exposures was withdrawn and banks ’ boards are allowed to formulate their own policies on unsecured exposures. banks are not required to obtain prior approval of the reserve bank for engaging in insurance agency business or referral arrangement without any risk participation, subject to their complying with the prescribed conditions. banks intending to set up insurance joint ventures with equity contribution on a risk participation basis or making investments in insurance companies for providing infrastructure and services support, however, still require prior approval of the rbi. various issues which received regulatory attention during the recent period include ownership and governance in banks, further progress towards international best practices in prudential norms with country - specific adaptation, greater deregulation and rationalisation of banking policies, compliance with know your customer ( kyc ) norms, strengthening the financial system for global integration in the light of the ongoing liberalisation of the capital account, greater inter - regulatory co - ordination and the drive for improving the quality of public services rendered by banks. in the evolution and implementation of policy, a consultative approach continues to be followed through formal institutional structures such as the board for financial supervision, the newly - formed standing committee on financial regulation, the technical committee on money and government securities markets and also through specific working groups and committees as well as formal and informal consultations with the regulated entities, external experts and professionals. transparency and disclosure transparency has been the watchword in our endeavour to promote best practices. moreover, transparency is crucial to a well functioning financial system. the rbi recognises the need to align standards adopted by the indian banking system with global standards. the reserve bank has issued detailed guidelines relating to several accounting standards. banks are required to ensure that there are no qualifications by the auditors in their financial statements for non - compliance with any of the accounting standards. we recognise that the banking sector will need to adjust to more exacting valuation rules. again, rules on disclosure will need to be exacting, including disclosure on penalties or adverse action by the supervisory authority. the financial sector has to recognise that exacting standards of disclosure are necessary to strengthen the financial sector and there is a world - wide move to such disclosures. in recognition of

inclusion may also pose risks to financial stability. as central bankers, we should promote greater financial inclusion but not without due care and caution. among the questions before us are : ( 1 ) what institutional structure and regulatory regime should we promote in order to maximize the benefits from financial innovations while minimizing the risks? ; ( 2 ) what mechanisms should be instituted to manage distressed institutions arising out of financial innovation? ; and 3 ) how should the public be protected from the associated risks including cyber - crime, among others? bis central bankers ’ speeches naturally, we would also be concerned to ensure reliable data management so as to monitor and appropriately adjust our monetary policy operations in tandem with the related structural changes. this symposium will help us to master the role of central banks in harnessing financial innovation so as to prudently maximize financial inclusion. it is now my pleasure to invite our eminent experts to make their presentations and to also encourage the active participation of every one of us in the deliberations. bis central bankers ’ speeches