economy in the 1990s, appropriateness of the monetary targeting framework was questioned with the changing inter - relationship between money, output and prices. accordingly, the reserve bank switched over in 1998 - 99 to a multiple indicator approach. with this approach, interest rates or rates of return in different markets ( money, capital and government securities markets ), along with data on currency, credit extended by banks and financial institutions, fiscal position, trade flows, capital flows, inflation rate, exchange rate, refinancing and transactions in foreign exchange available on high - frequency basis, are all examined along with output in framing monetary policy. the specific features of the indian economy, including its socio - economic characteristics predicate the investing of the monetary authority with multiple objectives for some time to come. while it could be desirable in the interest of clarity and transparency to stack up the objectives in a hierarchy, the jury is still out on the merits of public announcement of the policy weights assigned to each objective. flexibility in the setting of monetary policy should override consideration of transparency so that public indication of weighting patterns associated with objectives should not solidify into a binding rule. moreover, continuous monitoring of the underlying macro economic and financial conditions for monetary policy purposes will necessitate a continuous re - balancing of weights assigned to various objectives. in a pragmatic sense, therefore, it should suffice for the monetary authority to indicate the main objectives and an ordinal ranking, at best, to reflect the reading of underlying developments. a single objective for monetary policy, as is usually advocated, particularly in an inflation targeting framework, is a luxury that india cannot afford, at least over the medium term. the cause of monetary policy is not lost, however ; analytically, it can be shown that even if one of the multiple objectives is nominal among others that may be real, it can serve as the quintessential nominal anchor and enable monetary policy to work. this view is supported by a pragmatic and influential strand in the literature which questions the recent proliferation of inflation targeting as a monetary policy framework ( friedman, 2000 ; mccallum, 1981 ). as regards inflation targeting, as the monetary policy regime fulfilling the single mandate advocacy, the jury is still out. even though there has been an increase in the number of central banks adopting inflation targeting since the early 1990s, a number of central banks, notably the federal reserve, retain multiple objectives. i am not a monetary scholar, but i do feel that, given the

key challenges intrinsic to the business of banking. banks have the privilege of raising considerable sums of uncollateralized deposits which are their primary source of funds for their lending and investment operations. as such, co - operative banks are exceptions in the co - operative sector, wherein resources for lending and investment come from the public rather than just their members. this elevated leverage and disparity in maturity between assets and liabilities can be 1 / 5 bis - central bankers'speeches sustained only by continued trust of depositors. therefore, the governance mechanisms and practices within banks should give paramount importance to safeguarding depositors'interests and upholding their trust. some may argue that ucbs are not systemically important in view of their size and turnover. however, if we consider the inter - connectedness that binds the entire spectrum of financial entities, it becomes evident that any vulnerable link has the potential to erode public trust and confidence. in an increasingly interwoven financial landscape, the ripples of even an apparently small disturbance can resonate far beyond its initial impact. the failure in 2001 of a gujarat based ucb and more recently in 2019 to a mumbai based ucb attest to the contagion risks posed by even relatively smaller banks. consequently, it becomes imperative for us to remain vigilant and proactive in upholding the resilience of the ucb sector. as stewards of financial stability, we must recognize that our commitment to stringent governance standards, robust risk management practices, and proactive supervision is not solely aimed at safeguarding the individual entities. instead, it is deeply intertwined with the broader goal of sustaining public faith in the integrity of our financial ecosystem. with this background i would like to discuss three key challenges confronting the sector, namely, ( i ) governance and professionalism, ( ii ) adoption and upscaling of technology, ( iii ) capacity building in various operational areas with a view to enhancing efficiency. governance and professionalism effective governance forms the foundational bedrock. for ucbs, the need for robust governance mechanisms is even more pronounced due to their unique position as community - centric entities. transparent decision - making, accountability, and adherence to best practices are paramount. only boards whose members meet the standard of fit and proper in terms of age, relevant qualifications, experience and proven clean track record along with the right aptitude will be in a position to deliver the desired results. as i mentioned earlier depositors are major stakeholders and banks should always ensure