. 8 percent, underscoring the sector's resilience. the gross non - performing assets ( gnpa ) at 3. 2 percent were at a decadal low with net npas at 0. 8 percent. the uptrend in profitability has continued into its fourth consecutive year with return on assets at a healthy 1. 2 per cent and return on equity at 12. 9 per cent. as compared to 2018 when 12 banks were placed under the prompt corrective action ( pca ) framework, today no scb is under pca. 1 / 5 bis - central bankers'speeches as we note the current state of our financial system, it is also imperative to reaffirm our commitment to maintaining and building upon this robust position. our journey towards resilience should not end with achieving impressive metrics ; it requires a continuous dedication to sound financial practices, prudent risk management, transparency and ethics. we need to remain steadfast in our commitment to upholding the elevated standards we have achieved, ensuring that our financial institutions remain resilient in the face of any future challenges. a vibrant and resilient financial sector is a sine qua non for a country's growth and development. as our economy strives to grow in an evolving and uncertain macroeconomic environment, it is imperative that the financial system in general continues to remain resilient through the uncertainties to fuel economic growth. in our financial ecosystem, the strength of individual banks is the bedrock upon which the edifice of financial resilience stands. i believe a resilient future ready bank needs to be : i. financially resilient through adequate capital, liquidity and earnings ; ii. operationally resilient so as to deliver critical services to customers even in times of disruptions and iii. organizationally resilient to anticipate risks early and absorb them efficiently. in this context, i would like to discuss six aspects that, in my opinion, banks may need to delve deeper into in the upcoming period. interest rate risk effective management of interest rate risk is a crucial aspect of prudent banking. recent regulatory changes, notably, the symmetrical treatment of fair value gains and losses as well as removing restriction on htm have given banks greater flexibility in managing this risk in their investment portfolios. however, considering the dynamic nature of the interest rate risk, banks must proactively manage and mitigate this risk. increasing nims that banks are

related to good corporate governance and critical to any banking institution ’ s well - being is a rigorous internal control apparatus. of course, effective internal control systems have always been centrally important to sound banking. this point becomes clear if we consider for a moment their basic purposes : • to provide reasonable assurance that the bank ’ s and its customers ’ assets are safeguarded, that its information is timely and reliable, and that errors and irregularities are discovered and corrected promptly ; • to promote the bank ’ s operational efficiency ; and, • to ensure compliance with managerial policies, laws, regulations and sound fiduciary principles. with these purposes in mind, it is clear that the long - term success of any banking organization depends on the effectiveness of its internal control apparatus. and never has this been more true than today. as the activities of commercial banks have become increasingly diverse and complex, internal controls have become critically important to the sound and successful execution of banks ’ strategic objectives. i want to stress this point as strongly as i can. as a former commercial banker myself, i know there is a powerful temptation for management to focus its attention and resources on the front office – those areas and individuals that generate profits for the institution. but if something goes wrong in the back office, it can quickly become the most important aspect of a bank ’ s operations. we ’ ve seen this time and time again. it is essential that sufficient resources, staff and managerial attention are devoted to the back office and internal audit functions. firmly rooted on the foundation of good corporate governance and rigorous internal controls is the central importance of effective risk management. banking by its very nature is a business of taking calculated risks. if they didn ’ t take risks, banks could not perform their essential functions in a market economy. but sound banking also entails the prudent management of those unavoidable risks. each banking institution must have in place the technical systems and management processes necessary to identify the risks associated with its activities – lending and otherwise – and to effectively measure, monitor and control those risks. but even if an institution has an effective risk management and control structure in place, that structure must also be accompanied by an institutional management culture that ensures that written policies and procedures are actually translated into practice, with buy - in at all staff levels. ultimately, an institution's culture is determined – once again – by the board of directors and the senior management it chooses to install. management must take active steps to ensure that its commitment to an operating