have urged my banker friends to revisit the important issues in the light of international best practices, the need for protecting our consumers against fraud, the availability of insurance products to protect individuals from such frauds and finally a clearly spelt out compensation policy that is communicated to the customers upfront. the major areas of concern are internet banking related misuse / abuse, atm related service deficiencies, loss of credit / debit cards and extent of card holders ’ liability in such an event, penalty for not adhering to the aqb discipline etc. an important recommendation made by the damodaran committee was about banks appointing an internal ombudsman. this idea needs to be followed up and implemented proactively in the interest of consumer protection and impartial / transparent dealings. the common problems faced by customers very frequently pertain to atm issues, pensions, levy of service charges without prior intimation, credit card related issues, loans and advances etc. it puzzles me that the total number of credit card users is less than 10 % of the total bank customers ’ base but still this area accounted for 24 % of the total number of complaints handled by the b o offices during 2010 – 11. similarly, a proper enforcement of the bcsbi codes should necessarily result in the banks intimating their customers about changes in interest rates and service charges at least 30 days in advance. here again the number of complaints highlight the gaps in implementation of the codes at the branch level. pensioners are senior or very senior citizens and in a majority of the cases this is their only source of livelihood. we need to be empathetic and humane while dealing with pensioners. bis central bankers ’ speeches the best way to minimize the incidence of these complaints is to educate the customers and bank staff alike : -. global initiatives in consumer protection the global financial crisis brought to the fore gaps in consumer protection measures in the financial services industry worldwide. many countries that were affected by the crisis have standards and codes in place to set the minimum benchmarks for customer care. the failure of voluntary / industry led initiatives to protect the financial sector consumers and the backlash created by a public resentment against bankers and banking has forced many governments to come up with statutory measures aimed at financial consumer care and protection. when service standards are defined as a part of the statute any breach or violation of law attracts penalty. are we moving in that direction? this may not happen in the near future but even in the indian context the day may not

existing peg to the deutsche mark or the french franc, as for instance in the countries of the western and central african monetary union. in other cases, especially in the balkans, the euro has been unilaterally adopted as legal tender. overall, the euro has become the monetary anchor for about 50 countries all around the world. ladies and gentlemen! having outlined this general institutional framework, let me now turn to some more specific issues and challenges that accession countries face on their way to euro. although a lot has been achieved, accession countries will still need to further advance the process of bringing down inflation rates, while not delaying the much needed relative price adjustments within the economy. such price adjustments are part of the transition process and of structural real convergence and will typically entail inflation rates that may, for some time, range above those prevailing in the euro area. hence, accession countries are well advised to properly sequence the disinflation path toward the maastricht criteria and in some cases delayed entry into the euro area could be an optimal policy choice. the objectives of nominal and real convergence should be pursued in parallel. progress in nominal and real convergence will imply an orderly closing of the gap between the accession countries and the euro area economy, both in terms of per capita income and price levels. in order to reinforce each other, nominal and real convergence paths must be properly sequenced and mutually balanced. a fast - track move toward full nominal convergence and, in particular, toward complete monetary convergence could prove counterproductive in the pre - accession period. an important element of structural real convergence is further development of financial services structures, which were practically non - existent when transition started a decade ago. the main tasks are bank privatization, the development of a sound credit culture and the transformation of banks into efficient and competitive financial intermediaries. the three pillars of a functioning banking system are high - quality corporate governance of banks, market discipline in accordance with best - practice standards and efficient banking supervision. especially in transition economies, it makes sense to locate banking supervision with the central banks, at least for the time being, as central banks have the necessary funds to perform this task, have established their reputations and are already concerned with systemic risk issues. the strict implementation of eu treaty obligations, in particular those concerning the independent status of central banks, will be of fundamental importance. institutional, personal and financial independence are constitutive elements of central bank independence which are not an end in themselves but are instrumental in