k c chakrabarty : challenges for next generation banking address by dr k c chakrabarty, deputy governor of the reserve bank of india, at the indian chamber of commerce and industry, coimbatore, 25 june 2011. * * * mr. krishnan, president of indian chamber of commerce and industry, coimbatore ; mr. m. narendra, chairman and managing director of indian overseas bank ; mr. d. raj kumar, regional general manager, the hindu ; mr. k. g. balakrishnan, past president of icci, coimbatore ; members of icci and captains of industries in coimbatore ; representatives of banks in coimbatore ; members of the print and electronic media ; distinguished invitees, ladies and gentlemen, i am very happy to speak at this “ voice of tomorrow – fuel to excel ”, programme which is a commendable initiative by icci, coimbatore and the hindu. at the outset we must be clear about whose voice we are talking about when we say voice of tomorrow. to my mind the voice tomorrow belongs to the youth and the millions of business entrepreneurs of the country. not that the voice of business is not heard now. but they are by and large limited to lobbying through associations like icci. what i mean is that the collective voice of millions of private enterprise across the country. it is this voice together with the voice of the youth which will mould and build the future of this country. the young demography of this country will make the voice of the youth matter the most, going forward. and in a market based economy, with further reforms in critical areas to follow, the private business community will increasingly shape the face of the economy and also become a prominent voice in setting our vision for the future. it is in this context that industrial cities like coimbatore assume importance. mr. narendra mentioned that the indian economy is likely to register an average growth of above 8 % in the eleventh five year plan and that the 12th plan will see a growth of 9 to 10 %. it is my view that it is possible for india to aim at a 10 % growth for the next 20 years. only then growth will be truly sustainable and inclusive. private enterprise and investment coupled with the demographic advantage can be the underlying drivers of the country ’ s immense growth potential, going forward. we cannot forget the fact that india ’ s new growth trajectory of

an ongoing basis. all in all, our financial system provides a range of services that pretty much satisfies the needs of barbadian households and large and well established businesses. however, venture capital is in short supply, and the fixed investment needs of small and medium sized enterprise continue to be a challenge for us. our session this afternoon will explore this conundrum. impact of the crisis the global recession which is dated from the september 15 2008 lehman bankruptcy, had little effect on the barbadian financial system, with the one important exception of clico. as might have been expected, the weakness of the barbadian economy resulted in late and incomplete debt service by some firms and households, but in the typical case a workout arrangement was put in place. on the other hand, government maintained its perfect service record, both for domestic and foreign debt. bis central bankers ’ speeches changes in business finance the most noticeable changes in financial transactions in recent times have been on the foreign exchange market. the interbank market is now inactive, in contrast to the situation up to a decade ago, when daily interbank transactions of a modest size were the norm. large customers of the banks have corporate treasuries which manage their transactions and exposures in several currencies, matching exposures by currency so as to minimise net exposure in foreign exchange, and reduce the transactions costs of currency conversion. we have looked into this phenomenon at this conference in years past, and when we meet with banks we invariably discuss how the market is evolving. some businesses appear to have achieved a degree of independence of their bankers, with respect to foreign currency receipts and payments. in so far as this facilitates payment of imports out of private firms'foreign earnings, there is no problem with that arrangement. our programme today includes an update on the financial system, a presentation on cyber security, investment options for insurance companies, the view from the credit union sector, a new look at banking subsidiaries, and a panel on equity finance. it is a varied menu, and one that is certain to be instructive. we expect to have a productive day. bis central bankers ’ speeches