in the world, exceeds a full year ’ s imports and is far in excess of the external debt. the financial sector – a retrospect the thrust of the financial sector reforms has been on strengthening the financial institutions as well as developing various segments of the financial - market spectrum. the focus of reforms has also been on promoting the integration of financial markets so that financial intermediaries have the requisite flexibility in their operations. indian banks ’ balance sheets have strengthened considerably, financial markets have deepened and widened and, with the introduction of the real time gross settlements ( rtgs ) system, the payment system has also become robust. in addition, more recently, the endeavour of the reserve bank has been on greater financial inclusion and reaching out to the common person. the efficacy of financial sector reforms is reflected in the significant improvement in the asset quality of the banking sector. currently, all scheduled commercial banks are compliant with the minimum capital adequacy ratio of nine per cent. the overhang of gross non - performing assets of the scheduled commercial banks has declined from 8. 80 per cent of advances in 2002 - 03 to 3. 30 per cent in 200506. operating expenses, as a ratio of total assets, have declined from 2. 24 per cent in 2002 - 03 to 2. 11 per cent in 2005 - 06. thus, in terms of indicators of performance, given the background, the scheduled commercial banks have been able to deliver significantly in terms of stability, penetration and technological progress. in the process, the public sector banks ’ efficiency has also increased in an impressive manner and they are playing a very salutary role in financial inclusion. no doubt, there is scope and indeed a compelling need to increase penetration of banking services to all segments of the population and enhance both, efficiency and resilience in the system. while the stability and efficiency imparted to the large commercial banking system is universally recognised, there are some other segments which warranted restructuring as well. the experience with the urban co - operative banks ( ucbs ) at the dawn of the decade led to the enforcement of strict prudential parameters, and currently the issue of multiple controls in this sector has been addressed. a vision document for their healthy growth has been formulated. large - scale restructuring has commenced and is well under way. similarly, issues relating to rural co - operative banking structures, regional rural banks ( rrbs ), non - banking financial companies ( nbfcs ) and development finance institutions ( dfi

y v reddy : the indian economy – review and prospects speech by dr y v reddy, governor of the reserve bank of india, at the metropolitan chambers of commerce and industry, dhaka, 17 may 2007. * * * mr. latifur rahman, president – metropolitan chamber of commerce and industry, mr. mahbubur rahman, president – icc, bangladesh, the distinguished members of the trade bodies and dear friends, i am honoured to be invited to deliver this address today at the metropolitan chamber of commerce and industry, dhaka. we, in the reserve bank of india ( rbi ), had the pleasure of receiving recently your delegation. on that occasion, i had accepted the invitation, in principle, to address this gathering. i am glad to be able to fulfil my assurance. i have the honour of being associated, for over three decades, with several distinguished civil servants from bangladesh – notable among those who continue to be close friends are mr. syeduzzaman and mr. gholam kibria, former finance secretary government of bangladesh. i have had the privilege of working closely, among others, with respected dr. fakhruddin ahmed, while he was the governor of bangladesh bank, and also the current governor, dr. salehuddin ahmed – a well - known authority on microfinance issues. my familiarity with the economy of bangladesh is long and rather intimate. it dates back to my association with the executive director ’ s office in the world bank during 1978 to 1983, and more recently, as executive director on the board of the imf during 2002 - 03. further, as the deputy governor of the rbi during 1996 to 2002 and as the governor since 2003, i have the privilege of working with the bangladesh bank, with mutual trust and understanding in several fora such as saarcfinance group and asian clearing union ( acu ). in fact, i came to dhaka to attend the annual meeting of the acu whose chairmanship is currently with dr. salehuddin ahmed of bangladesh bank. one of the great contributions of your country to the global community is the demonstration of what voluntary and selfless service can achieve in poverty alleviation and restoration of appropriate personal dignity to every citizen : the slogan is " credit as a right ”. we, in the rbi, are grateful to professor muhammad yunus for having accepted our invitation to visit us and address us. our board, officers and staff have been inspired by his example and the address