also well above industry and regulatory standards. your total loan portfolio is nearly half a billion which accounts to 65. 5 percent of your total assets. your lending activities have surely provided farmers and other entrepreneurial rural folks with wider latitude in accessing credit which translated to better lives for the rural community. with your wide array of deposit products and credit lending programs, you managed to sustain bottom line figures at very good levels. rang - ay ’ s performance definitely did not go unnoticed as evidenced by the various accolades from financial and non - financial organizations 2, the bangko sentral included. as such, one can say that rang - ay is poised to further improve its level of efficiency to ensure continuous market leadership during these challenging but equally rewarding times. to date, the rang - ay bank has 1 head office, 9 bank branches and 1 affiliate bank ( rural bank of burgos, which will be consolidated with rang - ay, inc. following the grant of the certificate of authority to operate by the bsp rang - ay received 1 award from the bsp, 7 awards from other banks, 1 award from rural credit and guarantee corporation and 3 awards from a private non - government organization ( ngo ). industry outlook let me therefore take the next few minutes to outline the banking industry prospects in 2006 to help you firm up your strategic plans for this year and beyond. we are optimistic that the rural banking industry will sustain its positive performance this year and remain in the forefront of reforms as catalysts of a broad - based development in the countryside. for our part at the regulatory front, the bsp remains committed to the continuous implementation of our reform program to sustain financial stability and growth. specifically, our objective is to have a more stable, more efficient and a more depositor and friendly banking system. we are still advocating clean up of banks ’ balance sheets through the expedient and innovative disposition of non - performing assets. this is central to restoring the credit supply to the productive sectors of the economy. our goal is to bring the banking industry ’ s npa / npl ratio to single - digit level. as of end - june 2005, the rural banking industry ’ s npa / npl ratios stood at 11. 9 and 14. 7 percent, respectively. this is still double the pre - crisis period since the sale of npas under the spv law only created a small dent on the inventory of acquired assets arising from soured loans. we, thus, welcome

financial markets, the operational framework of the rbi also changed considerably with clearer articulation of policy goals and more and more public dissemination of vast amount of data relating to its operations. partly as a result of such institutional changes in recent years, inflation in india has been moderate relative to other developing countries despite high fiscal deficit, and most inflationary episodes have been caused by exogenous supply - side factors. as far as public finances are concerned, the government generally relied on domestic sources to finance the deficit. it has been pointed out by some experts that the rbi, though not formally independent, has enjoyed a high degree of operational autonomy during the post - reform period. in fact, during the recent period, the rbi enjoys considerable instrument independence for attaining monetary policy objectives. significant achievements in financial reforms including strengthening of the banking supervision capabilities of the rbi have enhanced its credibility and instrument independence. current status in terms of redefining the functions of the rbi, enabling a movement towards meaningful autonomy, governor jalan ’ s statement on monetary and credit policy on april 19, 2001 is a landmark event. first, it was decided to divest rbi of all the ownership functions in commercial banking, development finance and securities trading entities. secondly, a beginning was made in recommending divestiture of rbi ’ s supervisory functions in regard to cooperative banks, which would presumably be extended to non - banking financial companies and later to all commercial banks. thirdly, the rbi signalled initiation of steps for separation of government debt management function from monetary policy. these measures would enable the rbi to primarily focus on its role as monetary authority and enhance the possibility of a move towards greater autonomy. three other developments in recent years are expected to have far reaching ramifications in the operational framework of monetary policy in india. the first was the tabling of the fiscal responsibility and budget management legislation, which aims at the medium - term management of the fiscal deficit. the objective of the legislation is to impose fiscal discipline on government spending and ensure a transparent and accountable fiscal system. the second development was the coordinated endeavour of the government of india and the rbi to consider the implementation of international financial standards and codes. among the ten advisory groups constituted for this purpose, the advisory group on fiscal transparency ( chairman : mr. m. s. ahluwalia ) and the advisory group on transparency in monetary and financial policies ( chairman : shri m. narasimham ) have suggested some important changes in the operational conduct of monetary and fiscal policies and highlighted the