do we measure the well being of an individual or group of individuals? it is widely accepted that a uni - dimensional measure of income does not capture the various dimensions of personal welfare or happiness. the weaknesses in the income indicators have led to use of other measures to complement the per capita income. the quest for other approaches became necessary to neutralise the information distortions in the income measure. one of the approaches has been the physical quality of life index ( pqli ) which combines three indicators, viz. adult literacy rate, infant mortality and life expectancy. another approach is the ‘ basic needs approach ’ which moves from the philosophy of maximising output to minimising poverty. it argues that the basic needs of adequate nutrition, primary education, health, sanitation, water supply and housing should be available to the poorest to a reasonable extent. the human development index ( hdi ) approach is the third and most widely used index. the credit for popularising the human development approach mainly lies at the door of the visionary economist, mahbub ul haq. his quest to find ways and means of enhancing the quality of life people experience in the miserable world led to the eventual evolution of the hdi as a composite measure of development. nobel laureate professor amartya sen awarded for his work in welfare economics, a close friend of mahbub ul haq, is renowned for his contributions to the concept of human development. professor sen ’ s work is embedded in his enquiries into social choice, distribution and poverty. the hdi is a composite index measuring these basic dimensions of human development, such as, a ) long and healthy life ( measured by life expectancy at birth ), b ) knowledge ( as measured by adult literacy rate, and the combined gross enrolment ratio for primary, secondary and tertiary schools ), and c ) decent standard of living [ as measured by gdp per capita in purchasing power parity ( ppp ) in terms of us dollars ]. the undp's discourse, based on the above, focus on the broader attributes of human well - being. it has defined human development as a process of enlarging people's choices as well as raising the level of well being. in our country, we have prepared the national human development report by capturing the process of development and well being of people from two perspectives, the “ conglomerative ” perspective, which takes into account advances made by the society as a whole and the “ deprivation

paradigm. as the consumer preferences change, banking and financial services industry would have to reorient their business models, processes and products. to cater to this change, the rbi has started its groundwork on enhanced use of technology in banking such as use cases of artificial intelligence, digital ledgers, and so on. let me also add here that technology brings its own set of challenges in the form of data protection, cyber security, and technology - induced frauds. these are in fact areas which are increasingly engaging the attention of regulators not just in india, but also at a global level. strengthening customer service and conduct you all may have noticed that there has been a renewed focus on strengthening the conduct related aspects of our regulated entities. over the last one year we have issued instructions on the responsibilities of regulated entities employing recovery agents, strengthening of conduct regulations relating to pricing for loan related products, return of loan related security documents, addressing customer grievances related to reporting of credit scoring, among others. the recent announcement for lenders to provide their borrowers a key fact statement ( kfs ), which will be issued shortly, is also an endeavour in this direction. these regulatory initiatives are expected to foster more responsible lending conduct in lending by res. 4 / 7 bis - central bankers'speeches these efforts on regulatory front are being complemented by suitable supervisory examination of the conduct of regulated entities to ensure fair, sound, efficient and transparent delivery of banking products and services. as we further strengthen our approach towards addressing the concerns in framing and enforcing conduct - based regulations, the guiding philosophy would be to set out minimum regulatory expectations, with the option for entities to adopt higher standards depending upon their size, proportionality and customer focus. the regulations should ensure that customers are not misled by false promises and / or do not fall prey to unfair practices. improving governance and compliance & risk management another area of focus is on improving governance in the regulated entities. if one were to choose a single expression that epitomizes banking business, it has to be'risk management '. this arises from multiple factors including bank's fiduciary role in respect of depositors, their critical interaction with real economy and their role in ensuring financial stability. a strong governance framework and a robust risk management system coupled with effective oversight by the board and the senior management provides a greater degree of complementarity to the objectives of the regulator. recognising that governance is the bedrock of a sound banking system, guidelines have