understanding what the potential consumer needs and why he needs it is one such knowledge input ; indeed, i have tried to argue, a critically important one. i would like to end by thanking sastra university for inviting me to deliver this prestigious lecture, to the management of the city union bank for their very generous hospitality during our visit to thanjavur and kumbakonam and to all of you for coming here to listen to the lecture. bis central bankers ’ speeches bis central bankers ’ speeches bis central bankers ’ speeches

should be, how much security they should offer and for how long and how they should be financed are fundamental policy questions that go beyond the realm of the financial sector. however, to the extent that risk mitigation is a significant financial need, it must receive the attention of any meaningful financial inclusion strategy, in a way which provides practical answers to all these three questions. the fifth and final message is actually the point i began the lecture with. it is the critical importance of the principle of commercial viability. every aspect of a financial inclusion strategy – whether it is the design of products and services or the delivery mechanism – needs to be viewed in terms of the business opportunity that it offers and not as a deliverable that has been imposed on the service provider. however, it is also important to emphasize that commercial viability need not necessarily be viewed in terms of immediate cost and profitability calculations. like in many other products, financial services also offer the prospect of a life - cycle model of marketing. establishing a relationship with first - time consumers of financial products and services offers the opportunity to leverage this relationship into a wider set of financial transactions as at least some of these consumers move steadily up the income ladder. in fact, in a high growth scenario, a high proportion of such households are likely to move quite quickly from very basic financial services to more and more sophisticated ones. in other words, the commercial viability and profitability of a financial inclusion strategy need not be viewed only from the perspective of immediacy. there is a viable investment dimension to it as well. v. conclusion the basic premise of this lecture was that we need to take fully into account various behavioural and motivational attributes of potential consumers for a financial inclusion strategy to succeed. in this sense, it is no different from any business strategy development exercise. where it does differ though, is in terms of significance. there is clearly an enormous gap when it comes to access to and delivery of financial services. closing this gap will contribute to enhanced livelihoods through higher productivity, and an improved ability to deal with occasional, lumpy expenditures as well as cushioning the impact of financial emergencies. this is not a matter of a few hundred or a few thousand consumers, but an issue of hundreds of millions. the social costs and consequences of badly conceived and executed inclusion strategy could be enormous. we need to bring all relevant knowledge and experience into the development of the strategy in order to maximize the possibility of it bis central bankers ’ speeches succeeding.