the customer? ( ii ) who controls the transactions? has there been any worthwhile attempt to resolve them in a mature way? i would urge upon the banks and msps to get their acts together very quickly. on behalf of rbi let me assure you that we stand committed to the success of this collaboration and would remove all genuine obstacles! enabling cross border payments through the medium of mobile phones 15. should mobile initiated cross border transactions be enabled? to my mind there cannot be a uniform standard for this. the issue is country specific and each country has to take its decision based on need, issues and threat perception. as far as india is concerned, even during the worst forex crisis, the country was careful about the quality of inflows. secondly, we have had rules that required all forex flows to be routed only through banking institutions or others specifically authorized to undertake forex transactions. given this background, even if we had to agree mobile phones can only be used to trigger the transfer of funds from overseas by a non - resident to the beneficiary ’ s bank account in india. the banks will have to be responsible for ensuring quality of funds, kyc, etc. we have in fact permitted banks to enable cross border bank account to bank account remittance through the medium of mobile subject to clearance from the local regulator. at the beneficiary end, we have enabled loading of funds received from overseas under the money transfer service scheme ( mtss ) scheme on to a prepaid payment instrument issued by a bank, which could include a mobile wallet, to the recipient of the funds. conclusion 16. before i conclude, let me reiterate that the mobile phone is a potent tool to facilitate financial services and thus financial inclusion. it has the potential but the security and cost aspects have to be addressed. the medium of mobile has to sub - serve smaller transactions and must become cheaper. the reserve bank has for well considered reasons opted for a bank - led model as it is a complete model for delivery of a wide range of services. just as you cannot have tele - medicine without a doctor, you cannot have mobile banking without a bank! the bc model would help to complement mobile banking, as customers need to approach bcs / atms only for hard currency requirements and conduct other banking transactions from anywhere from their mobile phones, provided of course, there are no tele - connectivity issues! as mentioned earlier, it is the social responsibility of everyone, who has

supervisors, and regulators - who are being pressed to reevaluate how we meet our responsibilities. although the safety net necessitates greater government oversight, in recent years rapidly changing technology has begun to render obsolete much of the examination regime established in earlier decades. regulators are perforce being pressed to depend increasingly on greater and more sophisticated private market discipline, the still most effective form of regulation. indeed, these developments reinforce the truth of a key lesson from our banking history - that private counterparty supervision remains the first line of regulatory defense. the speed of transactions and the growing complexities of financial instruments have required a focus more on risk - management procedures than on actual portfolios. indeed, i would characterize recent examination innovations and proposals as attempting both to harness and to simulate market forces in the supervision of banks. the impact of technology on financial services and therefore, of necessity, on supervision and regulation is the critical issue that frames the supervisory agenda as we move into the 21st century. in today ’ s more complex world, the diversity of financial product choices facing consumers and businesses is truly astonishing. the complexity, as you know, has provided consumers with more choice but presented new challenges as well. in modernizing our banking laws and making them more consistent with marketplace realities, the congress ensured that the financial services industry can expand and innovate with far fewer artificial constraints. how various financial providers choose to exploit these wider opportunities will be among the more interesting dynamics of the years ahead. what will the financial services industry look like in whf ’ s 40th year? given the rapidity of innovation and technological change, that is impossible to predict with any certainty. accordingly, none of us can, a priori, lay out an optimal model either for financial services providers or for financial regulators. for policymakers, supervisors, and regulators, i would only suggest some general guidelines for the coming years : proceed cautiously, facilitate and participate in prudent innovation, allow markets to signal the winners and losers among competing technologies and market structures, and overall - as the medical profession is advised - do no harm. we are all fortunate to have the opportunity to be a part of this remarkable transformation of the financial services industry into one that provides more useful financial products and services to a broader spectrum of consumers and businesses. as i see it, the possibilities for education and debate will abound in coming years, and you and your colleagues are well positioned to continue to provide leadership in addressing the broad spectrum of issues that will