in the vast number of small, retail and sme clients which are presently deprived of bank credit. alongside extending the reach of their banking services, there would be a need to improve the products offered to customers and the quality of services. they need to have proper business model and delivery model. ( vi ) reaching to the unbanked / under - banked areas in india, growth with equity has been the central objective right from the inception of the planning process. the objective of financial inclusion is to provide financial services at affordable cost to those who are excluded from the formal financial system. this is vital for sustaining long term equitable development, since a large proportion of the households / areas do not have access to basic banking facilities, notwithstanding the existence of vast institutional framework in the country. an important challenge is to channelise more savings to the financial system, particularly in rural areas and from the urban informal sector. this would need further penetration of the banking system. the reserve bank ’ s emphasis on financial inclusion is important in attaining this objective over time. there is also enormous potential for extending finance in semi - urban and rural areas for productive activities, which may require strengthening the banking correspondent relationship, simultaneously enhancing the risk assessment and risk management capacities in order to maintain credit quality and sustain the credit growth in these sectors. besides benefiting the unbanked masses, this will also ensure viability and scalability of banks ’ financial inclusion initiatives. bis central bankers ’ speeches ( vii ) bringing down the cost of banking services further reduction in the cost of banking services may require greater competition among product lines, improved delivery mechanisms and increasing use of information technology. the costs of banking transactions need to be dramatically reduced as has happened in many other fields such as telecom, after the advent of technology. however, it is observed that, in banking, the transaction costs continue to be high, particularly in agriculture sector, which include costs incurred in appraisal of borrowers, processing, documentation and disbursement charges, loan monitoring / supervision and collection. it is essential to bring down such transaction costs to make available credit at affordable price to the farmers. balancing the real and financial sector reforms financial sector reforms alone will not bring continued prosperity. in the recent years, we see, growing evidence on growth deceleration in the indian economy. for sustaining the high growth path, improving the investment climate and enhancing the absorptive capacity by bringing in the real sector reforms would be critical. the fact that a well - developed

key information on the enquiries made towards obtaining credit. if a fraudster assumes someone ’ s identity and applies for credit across institutions, this information can be transmitted to individual banks as triggers or warning signals. i foresee that the next wave of innovation would be around developing tools and analytics in preventing frauds arising from identity thefts and i am glad to note that the conference has devoted a session for deliberating on the issue of frauds. role of alternate data sources as supplement to banking data the current banking policy places a lot of emphasis on financial inclusion. a key enabler tying up with the theme of financial inclusion is the information infrastructure and decisioning architecture necessary to bridge the information asymmetry divide for individuals who are first - time borrowers from the banking system. in order to reach out to individuals who never had any access to traditional banking channels or who have no credit footprint, some indicator of payment behaviour demonstrated by such individuals in their day - to - day lives need to be analysed during the process of underwriting. this could be the payment of utility bills such as water or electricity, telecom bill repayment, rental payments, healthcare payments, etc. these data sources are, typically, called alternate data which are supplements for banking repayment data. with alternate data, the coverage of people with some kind of payment history increases. including alternative payment data is an effective method to build or restore / rebuild a good credit history, something which the industry could bis central bankers ’ speeches consider in the future as it evolves further and matures in terms of competitiveness and customer sensitivity. from this perspective, low - score is always better than no score – unscoreable persons are almost always rejected by mainstream lenders when applying for credit. for such people, many of whom might actually be credit - worthy, the sole recourse would be to borrow from the money lenders. by virtue of being scoreable, a person greatly improves his / her chance of entering the credit mainstream. regulators across the globe have started acknowledging the role of alternate data sources in improving financial inclusion and, hence, bureaus in those geographies have started collecting non - traditional, non - credit data to augment the banking data. conclusion before i conclude, i must reemphasize that the credit information companies have a herculean responsibility towards developing a vibrant credit market and spreading consumers ’ awareness about the importance of credit and its responsible use. consumers need to be sensit