also need to focus on reforming the system. who pays for this one way bet large promoters enjoy? clearly, the hard working savers and taxpayers of this country! as just one measure, the total write - offs of loans made by the commercial banks in the last five years is 161018 crore, which is 1. 27 % of gdp. of course, some of this amount will be recovered, but given the size of stressed assets in the system, there will be more write - offs to come. to put these amounts in perspective – thousands of crore often become meaningless to the lay person – 1. 27 % of gdp would have allowed 1. 5 million of the poorest children to get a full university degree from the top private universities in the country, all expenses paid. the consequences let me emphasize again that i am not worried as much about losses stemming from business risk as i am about the sharing of those losses – because, ultimately, one consequence of skewed and unfair sharing is to make credit costlier and less available. the promoter who misuses the system ensures that banks then charge a premium for business loans. the average interest rate on loans to the power sector today is 13. 7 % even while the policy rate is 8 %. the difference, also known as the credit risk premium, of 5. 7 % is largely compensation banks demand for the risk of default and non - payment. since the unscrupulous promoter hides among the scrupulous ones, every businessperson is tainted by the bad eggs in the basket. even comparing the rate on the power sector loan with the average rate available on the home loan of 10. 7 %, it is obvious that even good power sector firms are paying much more than the average household because of bank worries about whether they will recover loans. reforms that lower this 300 basis point risk premium of power sector loans vis - a - vis home loans would have large beneficial effects on the cost of finance, perhaps as much or more than any monetary policy accommodation. a second consequence is that the law becomes more draconian in an attempt to force payment. the sarfaesi act of 2002 is, by the standards of most countries, very pro - supreme court, january 22, 2013 in union of india v. drt bar association bis central bankers ’ speeches creditor as it is written. this was probably an attempt by legislators to reduce the burden on drts and force promoters to pay. but its full force is felt by the

staff of the brbnmpl, other dignitaries and each and every one of you who have honoured us by gracing this historical occasion. 4. the banknote paper mill is a joint venture between the brbnmpl and the spmcil. security printing & minting corporation of india ltd. ( spmcil ), a wholly owned company of the government of india, was incorporated in january 2006 and represented the corporatisation of all the security printing and minting activities that were being done departmentally. bharatiya reserve bank note mudran private limited ( brbnmpl ) was established by reserve bank of india as its wholly owned subsidiary on 3rd february 1995 for undertaking the production of bank notes in india. 5. there are several advantages in this paper mill being set up in the premises of the brbnmpl ’ s press. besides adequate land, basic infrastructure and surplus residential quarters are already available in the brbnmpl ’ s premises. cotton, which is the principal raw material is available nearby from and around coimbatore. 6. going ahead, we are targeting to commission the first line with 6000 mt capacity by the latter part of 2012 and eventually achieve full capacity of 12000 mt in another year or so. the estimated pay back period is 4 / 5 years. with the cooperation of the centre and state government and others concerned, we are confident that these milestones can be achieved. 7. today, i would like to recount the reassuring response of shri pranab mukherjee to a query in an interview 1 he had with “ the tribune ” some years ago. on being asked as to what have been our ( india ’ s ) strong points, shri mukherjee replied : “ we have built up a huge infrastructure, industrial and human. we have the largest number of technically and technologically competent personnel. we have the third largest reservoir of human talent in the world. in purchasing power parity we have the fifth largest economy … ” we are encouraged and inspired by your confidence in the nation ’ s capabilities. we assure you sir, this mill, the foundation stone of which you are laying today will live up to your expectations. with these words, i once again extend a warm welcome to the hon ’ ble finance minister and to each one of you and seek your blessings for the success of this project. thank you. http : / / www. tribuneindia. com / 50yrs / pranab. htm.