more competition along with higher flexibility and operational autonomy to the banks, stability of the players at the same time was intended to be ensured by emphasising building up of risk management capabilities and introduction of prudential regulation and supervision in line with best international practices. moreover, widening of ownership due to stock market listing and associated disclosure requirements brought greater market discipline and transparency in the bank management. these measures transformed the banking sector which could be discerned in measures of efficiency and soundness. there has been steady decline in intermediation cost of banks from 6. 24 per cent in 1991 - 92 to 3. 43 in 2006 - 07. dea based estimates of efficiency and productivity indicates sharp improvement in operations of public sector banks and are now comparable to their counter parts in the private sector ( rbi, 2008 ). growing soundness of the banking sector is also evident in falling npas from 7. 7 per cent in 1995 - 96 to about 1 per cent in 2006 - 07. while banks ’ operations became more efficient, there has been considerable progress in terms of business volumes reflecting growing economy and reach of the banking sector. over the past 11 years, on an average, deposits of scheduled commercial banks have risen at a compound growth rate of 17. 7 per cent and advances grew by 21 per cent. growth has been higher for urban and semi urban branches compared to rural branches. in terms of advances to various sectors of the economy banks ’ portfolio has been quite diversified. since, 1998 - 99, while share of advances to agriculture sector remained around 12 per cent, there has been progressive diversification from industrial and wholesale credit to segments such as professionals, personal loans, etc ( annex 4 ). payment systems the rapid developments in the payment systems and technology have led to the deeper penetration in terms of increase in the number of direct and indirect participants and market players in the payment systems. among the major developments in recent times, the enactment of the payment and settlement systems act, 2007 empowering the reserve bank to regulate and supervise payment and settlement systems, lay down policies and providing a legal basis for multilateral netting and settlement finality, is of great significance. another recent development has been to make free the use of other bank atms with effect from april 1, 2009. the service charges for “ electronic payment products ” and outstation cheque collection have also been rationalised. “ speed clearing ” has been introduced to reduce the time taken for realisation of outstation cheques to t + 1 or t +

make in india ’ pitch also touches the right cords and efforts are afoot to increase the presently stagnant share of manufacturing in gdp to around 25 – 30 % by 2025 from 15 % at present. if that materializes, it would mean addition of 90 million domestic jobs and attendant corporate and retail business opportunities. e ) education 9. likewise, there is tremendous scope of improving the level of education in the country by strategic focus on the four es i. e. expansion, equity and inclusion, excellence & employability. it would entail significant changes in consumer awareness, needs, demands and expectations. f ) financial inclusion 10. the launch of the pmjdy scheme with a focus on linking each household with a bank account has received extremely positive response. at last count, the number of accounts opened under the scheme had reached 12. 14 crore. i don ’ t need to emphasize the avenues that this scheme has opened for the bankers. moreover, it is just a stepping stone. major part of the work has to commence now. g ) global integration 11. that brings me to the last theme of growing global integration, which i believe is already having significant repercussions on the financial sector. be it the quantitative easing by the advanced economies and the subsequent withdrawal of it, convertibility of currency, making or breaking of regional alliance of economies and currencies etc. there could be other hitherto unforeseen developments too affecting the global structure of finance. let me highlight two recent headlines reported in financial times : one, the potential exclusion of russia from the swift payment system and the other about withdrawal from correspondent bis central bankers ’ speeches banking relationships in 30 jurisdictions by three of the world ’ s biggest banks. ostensibly, the motivation for these banks to sever their ties with the lenders in developing nations has been to limit the risk of being hit by regulatory sanctions on account of breaches, money laundering and terrorist finance. events such as these, though having their origin in specific jurisdictions, have the potential to significantly impact the business and finance elsewhere in the globe. 12. under the circumstances, it would be important for the banks to keep track of emerging trends and be prepared not only to negotiate through the imminent challenges, but simultaneously be ready to latch on to the opportunities that present themselves. key actors / acts in the new banking landscape 13. let us see what would be the impact of these themes / developments on the key actors / acts in the new banking landscape.