to the minimum. while we remain technology neutral, we require banks to seamlessly integrate whatever technology they choose, with their cbs architecture. as a philosophy, we have always encouraged banks to pursue fi as a commercial activity and to not view it as social service or charity. the self - sustainability and commercial viability of the fi initiatives are important if banks have to scale up their operations to cover more unbanked areas. we have advised banks to adopt innovative business models and delivery channels to expand their fi efforts. there is a need for banks to develop new products and design new delivery models that are customized to the unique needs of the financially excluded population, both in the rural and urban areas. the reserve bank has sought to play a supportive role in fi by creating a conducive regulatory environment and providing institutional support to banks in their fi efforts. importantly, we have provided banks the freedom and the space to determine their bis central bankers ’ speeches own strategies for rolling out fi and have encouraged them to identify their own goals and targets through their respective financial inclusion plans. institutional mechanism 4. our strength lies in the fact that we have created a robust institutional mechanism to support the roll out of banking services across the country. this was essential considering the enormity of the task in terms of the number of excluded people and the geographical size of the country. our institutional architecture includes : the financial stability and development council ( fsdc ) chaired by the union finance minister and involving heads of all financial sector regulators, which has financial inclusion and financial literacy as one of its important mandates. a technical group on financial inclusion and financial literacy under the fsdc involving not just the financial sector regulators, but also the education boards and curriculum developers. a high level financial inclusion advisory committee ( fiac ) set up by rbi to focus on providing strategic direction to fi initiatives across various stakeholders. a strong institutional mechanism at the level of banks through 35 state level bankers ’ committees, 644 lead district managers and more than 100 thousand bank branches. more than 700 financial literacy centres and rsetis imparting financial literacy to complement the financial inclusion measures. recent financial inclusion initiatives 5. learning from the experience gained from the outcomes of our fi initiatives over the years, the reserve bank has taken certain additional steps to provide greater impetus to the process of financial inclusion. we have encouraged banks to adopt a structured and planned approach to financial inclusion with commitment at the highest levels, through preparation of board approved financial inclusion plans ( fips )

used to be in a situation before the crisis where the eonia was fluctuating close to the mro. we ’ re probably back to a situation where we will see wider fluctuations between the deposit facility rate and the mro but that ’ s also because of fragmentation that hampers the adjustment process. but at long as this is a stable process i think it is fine. what are your expectations as regards the recent proceeding in the european parliament ’ s on the srm? the ecb deems the single resolution mechanism a necessary complement to the single supervision mechanism, so it ’ s very important that an agreement is reached in this parliamentary session. any remaining time should be used to improve this mechanism. we ’ ve suggested for instance that shortening the timeframe for mutualisation of the single resolution fund would be helpful to give a clearer perspective that a single european backstop will come within a reasonable timeframe, helping to cancel the link between banks and sovereigns. that does not necessarily imply that the contributions of banks would be accelerated, because you can build up the fund within a certain timeframe and have a different timeframe for mutualisation within the fund. do you expect bank lending to recover now that banks have adjusted their balance sheets for the asset - quality review? it would be a risky situation in my view to start single supervision without a perspective for a single resolution mechanism. that would be a very uncomfortable situation for the ecb as a supervisor. we ’ ve seen a certain amount of front - loading, of accelerated deleveraging ahead of the aqr cut - off date, meaning dec. 31, 2013. there is a risk that we will see another wave of deleveraging when the aqr results are known and action has to be taken. my personal plea to supervisors and to banks would be that this will be done through raising capital rather than by cutting loan books. how concerned are you about the mood in europe and the lack of trust towards european institutions? we see elements of a negative spiral whereby european citizens don ’ t trust european institutions and governance, while at the same time it is necessary to strengthen them to provide a solution to the crisis and put the euro zone back on a sustainable growth pact. european institutions jointly have to break that negative spiral and to create enough trust so that european citizens will feel comfortable and then they can deliver on addressing the sources of the crisis. we have to turn that negative spiral into a positive spiral. the best way to do it