and convenience. all these issues are receiving due attention for prioritized resolution. rbi has also established national payment corporation of india for focused attention on development and implementation of requisite technologies for enabling new modes of delivery. electronic payment systems one of the areas where technology has facilitated significant revolution is payment systems. it started with the mechanization / automation of certain processes by introduction of cheque sorters and readers, micr based clearing etc. and has moved on to use information technology for efficient funds transfer mechanisms such as ecs, neft, cts, rtgs. the focus has shifted from the initial needs of capacity management for handling increasing volumes, to efficiency enhancement in transaction processing for the benefit of businesses, markets as well as retail customers. we are witnessing increasing utilization of these delivery mechanisms and have to think about the next higher level of technology and sophistication to bis central bankers ’ speeches meet the rising expectations of the market participants. rbi has already initiated work towards introduction of new generation rtgs, which will be able to handle rising volumes, provide better functionalities and has better technological adaptability. our journey towards leveraging technology for making our payment systems at par with the best in the world will continue with appropriate contributions from all concerned. another important benefit derived from information technology deployment is the ability of banks to provide innovative delivery channels. online banking, debit & credit card payments, atm access to other bank customers, point of sales terminals etc. have all changed the way bank customers are able to transact for their day to day needs, thereby creating a huge eco system of convenient banking facilities which substantially reduces the need for physical proximity and handling of cash. it also provides access to a large number of global retail markets to our citizens. use of it for improving internal effectiveness – significance and benefits focus of technology in indian banking, so far, has, mainly, been on transaction processing, data storage, service delivery, and rightly so. these were our priorities to make banking better, convenient and more accessible. now, that our banking has reached a stage where many of such services are running on tech enabled processes, we can look forward to improving other areas which were not, hitherto, focus of our attention and have huge scope for improvement, such as internal management and back end processes. currently, while data storage and retrieval are on computerized systems, the administrative processes are largely manual, warranting huge resource deployment. this adds to costs, impacts efficiency and reduces effectiveness of

k c chakrabarty : indian banking sector – pushing the boundaries valedictory address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the 11th advanced management programme “ towards the next orbit – indian banking sector ”, organized by the international management institute ( imi ), new delhi, 14 february 2013. * * * assistance provided by ms dimple bhandia in preparation of this address is gratefully acknowledged. 1. dr pritam singh, director general, international management institute ( imi ), participants from reserve bank of india and the commercial banks! it is a pleasure to be amongst you today as you complete the first leg of the learning experience which is the advanced management programme. i believe that the programme is craftily designed with an appropriate blend of lectures and interactive sessions with some leading academicians, industry captains and management experts, both from india and from european business schools. it is a rare learning opportunity for all participants – to understand and gain insights into global banking systems and develop awareness and appreciation of the emerging business environment. apart from the opportunity to gain from structured classroom learning, such programmes also offer a unique forum through which participants can learn from each other and assimilate the best management practices across organizations. i hope all of you will take advantage of this wonderful opportunity. 2. being a part of the banking system, which forms the core of the financial architecture of the economy, you have an inimitable opportunity to influence the economic lives of the nation ’ s populace. we all know that banking plays a silent, yet crucial part in our day - to - day lives. the banks perform financial intermediation by pooling savings and channelizing them into investments through maturity and risk transformations, thereby keeping the economy ’ s growth engine revving. 3. the central theme of the programme, as in the previous year, is : “ indian banking sector : towards the next orbit ”. the theme is, arguably, even more relevant today than a year ago. while, on the one hand, the outlook for the global economy continues to be grim, the outlook for the domestic economy is also far more subdued than the last year. growth of the indian economy for 2012 – 13 is projected at 5 per cent – significantly below the 9 per cent growth rate envisaged during the twelfth plan and well below our desired goal of double digit growth rate. the indian banking sector has also faced significant challenges. asset quality of banks has come under