is noticeable with shifts in yield at the very long - end. by and large, the behaviour of the fixed income market has been in consonance with the monetary policy stance. in the light of expectations in the monetary policy about a reduction in the lending rates, there is some evidence of a commitment by banks to reduce the prime lending rates ( plrs ) in january, 2004. following the introduction of the benchmark plr ( bplr ) concept, 11 public sector banks have already announced their bplr while the rest have assured the indian banks association ( iba ) that they will similarly announce their rates. as a result, the new bplrs are now lower by 25 - 50 basis points. the progress in regard to movement of interest rates by the banking system has been largely in consonance with policy expectations. while no direct link can be established between lending rates and credit off - take, simultaneous and intensive efforts will have to be undertaken by the banking system to remove the procedural and transactional rigidities in the delivery of credit, particularly to agriculture and small industries. a noteworthy feature of credit off - take has been the impressive increase in priority sector lending in the current financial year and this has posted the highest growth in recent years. there is scope for further improvement in regard to both credit pricing and credit delivery. efforts by rbi, with close co - operation from banks, will have to be intensified. now, let me turn to external developments. since the mid - term review, the prospects for the world economy have improved further, while at the same time, the uncertainties relating to the currency movements of major currencies have increased. whereas the monetary policy in many countries has moved to mild tightening in some countries, in others there is a neutral bias with expectations of tightening, particularly in the u. s., with no firm indication on the timing. these uncertainties would necessarily have an impact on global liquidity as well as the flow of resources to emerging countries including india. as far as india is concerned, the relative weight of the fundamentals and confidence in the economy appears to be more than the global liquidity factors that govern the capital flows. as such, on current reckoning, for us there could be some moderation, but no dramatic deceleration, in capital inflows. the indian forex market generally continued to witness orderly conditions during recent months. at the time of the mid - term policy, the exchange rate of the rupee, over

of services shifting beyond traditional financial offerings of banking services to offering up a suite of products including wealth management and other financial products. what this means is that that the financial institutions would need to continuously reinvent their business models and update their product offerings. for this to happen, a vital cog in the wheel, so to say, is having a set of skilled employees and a motivated workforce. the pace of change we encounter nowadays is swift, and by all indications this pace will only increase, riding on the crest of the digital transformation playing out in the financial services industry. therefore, it is imperative that the financial institutions and their employees have the capacity to not only deliver on the expected service levels 1 / 5 bis - central bankers'speeches continuously, but also have the capacity to adapt to both foreseen and unforeseen challenges. in current times, building the capacity of employees and continuous upgradation of their skills is not an option but a necessity. in any service industry, amongst the four factors of production, human capital is the most significant which fundamentally determines the growth trajectory of the institutions and organisations. human capital is not just important in the areas of the organisational structures and functioning but is also critical in fostering innovation and increasing productivity which contributes substantially towards both individual and institutional growth. this is true in the case of banking industry as well. the agility demonstrated by banks and financial services firms during the pandemic is a testament to their investment in human resources and technology. as their focus shifted towards digital mode of interface, they scaled up remote engagements and quickly reshaped overall working models. employees were dynamically redeployed amongst verticals based on evolving business needs. this experiment served the institutions well in various aspects – in optimal utilisation of human resources, in timely on - boarding new customers and in ensuring business continuity. in my view, this exploratory experience would have given many of the banks a sense of comfort and confidence in agility - driven dynamic allocation of a future oriented workforce. here, let me emphasize that when i say skilled workforce, i do not mean the to say that the focus should be on the functional and technical knowledge of the employees alone. soft skills are equally, or dare i say, more important in a service industry like banking. an effective customer engagement together with an empathetic approach acts as a major differentiator in a highly competitive market. also, unlike technical skills which frequently get obsolete with changing business environment,