y v reddy : what the reserve bank of india means to the common person speech by dr y v reddy, governor of the reserve bank of india, at karamchedu village, ongole district, andhra pradesh, 18 february 2007. the speech was originally delivered in telugu. * * * friends, i am happy to be in karamchedu village again. many distinguished personalities in various fields ; freedom fighters ; shipping magnates ; scientists ; poets, ministers and medical doctors have hailed from this single village. shri yarlagadda ranganayakulu garu, who was an engineer by training, is one such fine personality. we met accidentally a little over thirty years ago in hyderabad. we became friends and we attempted to do some socially useful work on several fronts but succeeded in founding hyderabad study circle. so, i have a personal affection to him and our families have developed affinities and affections. the ties extend to family in a broader sense – to include, for instance dr. y. p. c. s. rao garu and shri laxminarayana garu. when his family members suggested that i should associate myself with a worthy social contribution in memory of my friend shri ranganayakulu garu, i felt it an honour and privilege to visit karamchedu and be with you all. the formation of a trust devoted to rural development and, in particular, safe drinking water, is a noble cause worthy of emulation by the younger generation. that young generation which is enjoying the fruits today of the foundation laid by yarlagadda ranganayakulu's generation. in an informal manner, i wish to say a few words on this occasion and the appropriate subject is perhaps'what reserve bank of india means to the common person '. reserve bank, above all is a public institution serving the public interest. though the word'bank'is associated with its name, profit is not its primary motive. therefore, it is necessary for every common person to understand about its role and its functions in improving the welfare of the people at large. the reserve bank is the'central bank'of the country and uniquely placed to perform certain specific and challenging public responsibilities. it is the monetary authority of the country, and as you know rupee is our currency unit in this country. rbi broadly deals with the quantity of rupee resources that should ideally be available in the country to promote economic growth and smooth transactions in goods and services.

micro level impact studies, appropriately designed periodic surveys would be a useful tool. surveys are also needed for assessing viability of delivery models, sustenance of initiatives, gauging the spread of financial literacy and measuring barriers to financial inclusion. a robust financial inclusion design depends on a multiplicity of parameters encompassing varied socio - economic backdrops and feasible financial service delivery mechanism that would vary from region to region. this is particularly so for a country like india, which is distinguished by its vastness of topographical, demographic as also socio - economic diversity. like any broad based financial system, financial inclusion measures and performance monitoring system require a rich body of performance data and analytics. many a time, country comparisons brought out by international bodies based on their dedicated database dwells on much aggregative data comparison which, when seen granularly, bespeaks a different story. this is very relevant in financial inclusion analytics, which requires new kinds of identifiable indicators based on the evolving needs of financial inclusion plan and program. concepts and definitional issues the fact that financial inclusion concepts have different meanings in different parlance has often led to difficulty in using a standard yardstick for benchmarking its policy parameters. the associated difficulties are that the targeted variables used for financial inclusion may differ from one country or organisation to another because of different institutional set up. inherent weaknesses in the linkages between the financial inclusion database and welfare parameters of the society add to the complexity. moreover, there are no agreed composite measures of financial inclusion which could facilitate comparisons across time and geography. therefore, in order to ensure consistency and accuracy in measurement of bis central bankers ’ speeches financial inclusion parameters, it is essential that the parameters concerned are objectively defined in the first stage of the measurement process. as a way forward, we need to assess financial behaviour and understand where the challenges and opportunities lie for the future. to do that, we need high - quality, multi - dimensional, comparable financial inclusion data based on internationally standardized terms and concepts. as such, the measurement needs also include analytics for correct interpretation of data and establishment of international benchmarks. various dimensions of data on financial inclusion there are several structural dimensions in the process of building up data on financial inclusion. these include : ( i ) measurement of the progress in financial inclusion initiatives by way of building up suitable indictors. such indicators must contain data on access to ( supply of ) and usage of ( demand for ) financial services as well as their coverage and penetration. measuring availability and