msme sector, which has the potential to foster strong growth by creating local demand and driving consumption. presently, msmes contribute nearly 8 per cent of the country ’ s gdp, 45 per cent of the manufacturing output and 40 per cent of the exports. they provide the largest share of employment after agriculture and are nurseries for entrepreneurship and innovation. acknowledging the importance of the sector to economic growth, both - government of india as well as rbi have been taking measures to enhance flow of credit to the sector. on its part, rbi has launched several initiatives in this regard. to specifically address the issue of delayed payments to the msme sector, treds has been conceptualised as an authorised electronic platform to facilitate discounting of invoices / bills of exchange of msmes. on the other hand, as part of capacity building of msme divisions in banks and to develop entrepreneurial sensitivity, rbi has recently launched targeted training programmes for the functionaries in commercial banks. government of india has also recently laid out a framework for revival and rehabilitation of msm enterprises. the other initiatives of government of india i. e. “ make in india ”, “ skill india mission ” and “ digital india ” also ties in neatly to provide further push to the sector. bis central bankers ’ speeches role of banks in financing growth 15. traditionally, like other emerging markets, indian economy has been bankdominated. so whether it is for project development, or working capital needs of the corporates, banks have been the primary source of credit. though primarily banks are supposed to undertake maturity and liquidity transformations, there are limitations on the extent of asset - liability mismatches they can run on their books. the large scale distress being witnessed in banks ’ infrastructure portfolio also raises issues about their ability to critically appraise such projects. the typical role for the banks in mature markets is to originate loans and then distribute to other willing players in the market. they predominantly undertake working capital finance and provide structured financial solutions to their clients. they also act as market makers for various financial sector products. with the gradual widening and deepening of our financial markets, it would be fair to expect our banks to also gradually shift their focus to sme and retail clients while leaving the long - term resource contribution to other players including pension funds / insurance companies which have longduration liabilities on their balance sheets. 16. there is another factor relevant in this context. while the banks ’ ability to dispense credit depends upon their capital

g gopalakrishna : training for commercial bankers speech by mr g gopalakrishna, executive director of the reserve bank of india, at the inauguration of the academic block of the nitte institute of banking and finance, mumbai, 9 november 2013. * * * i acknowledge the contribution made to the above speech by shri r kesavan, general manager, central office, dbs. honorable chancellor shri vinay hegde, professor dr ramandanda shetty, dr shantaram shetty, dr thingalaya, shri anantha krishna, chairman, karnataka bank, ladies and gentlemen. it gives me immense pleasure to inaugurate the academic block of nitte institute of banking and finance. it is an opportune time as also the need of the hour to enhance professional skills of bankers since we are poised for a big leap - waiting to enfold new banks, new banking structure, perhaps a lot more innovation in banking procedures and a greater contribution to the whole process by information technology. here is where institutes like nitte can help in levelling knowledge and awareness and create a level playing field for bankers in terms of skills and attitude. my thoughts today are focused on the increasing need to integrate the present with the future. the past is passe though it has taught us many lessons. gone are the days of conventional banking where things could be predicted with reasonable precision. the changing scenario around us and across the world leads to the conclusion that there is an imminent need to keep abreast of everything under the sun when it comes to banking... this then forms the crux of our interaction today – how can such far reaching changes be brought in the mind - sets of millions of bankers who look at these recent developments with awe, interest, curiosity and also with a determination to surmount the impending challenges. one of the main challenges today is to recruit appropriate work force, train them and also retain them. at the same time, it is imperative that we, as bankers, also do not lose sight of the training needs of those who are with us today, have been with us for a considerable period of time and will continue to extend the same sense of loyalty to the institution that they have served. in order that the banks compete in a healthy manner as also enhance the capabilities of their workforce, the utility of training as an essential tool in today ’ s challenging times cannot be undermined. nitte and other institutions with similar philosophies have a stellar role