inaugural address by governor, shri shaktikanta das at the statistics day conference on june 29, 2022 it is a privilege to inaugurate the annual ‘ statistics day conference ’ of the reserve bank. this annual event is taking place today in the physical mode after a gap of two years. on this day, the nation commemorates the contributions of professor prasanta chandra mahalanobis, one of the pioneers in the discipline of statistics and a true visionary. professor c. r. rao, a great statistician and a student of professor mahalanobis described him as “ a physicist by training, a statistician by instinct and an economist by conviction ” 1. 2. professor mahalanobis is regarded as the father of modern statistics in india. he established the indian statistical institute ( isi ) in 1931 and was also responsible for the establishment of the official statistical system in our country, including the large - scale nationwide sample surveys. he displayed keen interest in development of innovative statistical techniques for studying questions pertaining to welfare of the people. as such, his work highlighted the universal applicability of statistical methods in major scientific and social disciplines – agriculture, meteorology, statistical quality control, economics, anthropology and demography, to name a few. 3. professor mahalanobis was appointed honorary national statistical adviser to the union cabinet in 1949 and was the chairman of the first national income committee formed in 1950. the second five - year plan was based on his model of economic development. he rao, c. radhakrishna ( 1993 ). “ statistics must have a purpose - the mahalanobis dictum. ” sankhya : the indian journal of statistics, series a ( 1961 - 2002 ), vol. 55, no. 3, pp. 331 – 49. received india ’ s second highest civilian award, the padma vibhushan, in 1968. 4. as i pay tribute to professor mahalanobis, i propose to touch upon the unique challenges faced by the discipline of statistics in these uncertain times, and the evolving expectations from the discipline and practicing statisticians. the importance of statistics in public policy is well understood. in the face of high uncertainty brought on by the covid - 19 pandemic, the discipline of statistics found itself in greater spotlight. this unprecedented global phenomenon has tested human endeavour in multiple facets and magnitude. the lockdowns in various countries, including our own, posed severe challenges to the compilation and availability of data relating to the spread

acquisitions among two psbs. some caveats 15. having said that consolidation in psbs is worth considering, i would hasten to add certain caveats. 16. it is not that a large size is always beneficial for the banking system and overall economy. the benefit of size is observed up to a threshold level of size. a size beyond this threshold size may have negative consequences for the economy. existence of excessively large banks may also create significant moral hazard costs for the entire system. a failure of a very large bank may have systemic implications and therefore, there is a perception that large banks may be bailed out during stress periods. this expectation of government support create the perception of too big to fail, and this may improve their creditworthiness resulting in significant funding advantages. this implicit government subsidy enjoyed by these banks incentivises them to grow even bigger and makes them use higher leverage and engage in risky market - based activities. during the recent financial crisis, it was learnt that problems created by large banks ( seen as too big to fail ) can only be addressed by specific regulations targeted to these banks only. one of the important aspects of the post crisis regulatory reforms has been formulation of specific regulatory requirements targeted at larger banks. 17. psbs as a group have not been performing well during the last few years. there has been a large increase in non - performing assets ( npas ). as a part of managing large npas, some suggestions have been made that perhaps a consolidation of psbs can render them more capable of managing such challenges relatively better. the basic argument is that a large bank will have been well capitalised, will have deeper expertise to handle large credits and large npas and hence can ride off troughs with relative ease. 18. it has to be ensured that mergers among two banks should not be seen as a fix to short term problems as being faced by certain psbs. merger may be useful only if it has strategic vision driven by synergy and creating value for both the banks. merger of a weak bank with a strong bank may make combined entity weak if the merger process is not handled properly. the problems of capital shortages and higher npas may get transmitted to stronger bank bis central bankers ’ speeches due to unduly haste or a mechanical merger process. consolidation should not be seen from the sole perspective of creating larger sized banks. while it is agreed that under present banking structure in india, creating a few large size banks is desirable, it has to be