maintaining a clean credit history. i observe that the theme of the conference “ transforming credit information into action : powering growth through data, analytics and decisioning ” is very topical as it reflects a vision of taking the industry forward. in my address today, i would outline the essential pre - requisites of a good credit information system and how this information can be used for improving the efficiency of the credit delivery system in the country. i would also share my perspectives on some of the issues and challenges facing this sector and the regulatory / supervisory measures taken by rbi in this area. however, before i get into those issues, let me begin by giving a brief historical perspective of the functioning of credit information companies in india. historical perspective 3. with a view to facilitating the distribution of credit to all sectors of the economy, rbi observed a need for establishing a credit information bureau for the collection of credit information relating to borrowers fromlending institutions and for the provision of such information to the financial system. accordingly, a working group ( chairman : n. h. siddiqui ) was set up in 1999 to explore the possibilities of setting up a credit information bureau in india. the group, in its report of november 1999, affirmed the urgent need for establishment of a credit bureau and accordingly, credit information bureau ( india ) ltd. ( cibil ) was incorporated in august 2000. cibil launched its credit bureau operations in april 2004 and its commercial bureau operations in may 2006. following enactment of the credit information bis central bankers ’ speeches companies ( regulation ) act ( cicra ) in 2005, three other credit information companies ( cics ) have also been set up. 4. at the level of a regulator, credit registries can play a pivotal role in providing insights that can drive effective policy changes. they can also provide important inputs for the banking supervisors in monitoring systemic risks. a further use at a regulatory level may be to analyze appropriate capital and provisioning strategies for banks and, in particular, to assess whether current capital and provisioning regulations match up to actual risks. for the cics / credit registries to be effective, the integrity and completeness of data is one of the essential pre - requisites. however, as i alluded to a little bit earlier, even after more than 10 years of their existence, the credit information companies / bureaus have not been able to penetrate the market in a meaningful way. there are a whole host of issues which have impeded the growth

indian banks to learn from the successes and failures around the world, study international best practices and adapt them to the indian conditions. just as banking around the world is not going to revert to being boring, neither will indian banking get boring. 35. in fact, i will go further and argue that boring banking is an oxymoron in the indian case. here my intent is to argue not so much from the perspective of a banking model – narrow or full service – but from the perspective of the challenges that indian banks will have to meet. meeting these challenges is going to demand lateral thinking, entrepreneurship and management calibre – all a far cry from anything like boring. in order to illustrate this, i will list and explain what in my view are four big challenges that indian banks will need to address. first challenge : financial inclusion 36. despite its impressive progress, commercial banking in india has not penetrated sufficiently to serve the large mass of rural, illiterate and poor people in any meaningful way. rough estimates indicate that of the 600, 000 habitation centres in the country, only about 30, 000 centres are covered by commercial banks. even this big picture, stark as it is, does not fully convey the true extent of exclusion. furthermore, even where 100 per cent financial inclusion is claimed, oftentimes it is inclusion only in a nominal sense. households have bank accounts that remain dormant ; few conduct any banking transactions and even fewer receive any credit. what we should attempt is quality financial inclusion which aims not at chasing a target but instead focuses on giving access to at least minimal financial services to the currently excluded. 37. the reserve bank has taken several steps over the last few years to further financial inclusion – encouraging “ no frills ” accounts to allow access to basic financial services, initiating and then expanding the business correspondent ( bc ) model and the use of mobile phones for extending banking outreach. more recently, we have expanded the categories of entities that can be appointed as bcs and also allowed banks to charge a commission for services rendered by bcs. there are of course formidable challenges to the bc model that we need to address – high maintenance costs, small size of transactions, expanding awareness, improving communication skills and techniques for dealing with semi - literate people in local languages, enlisting the cooperation of the village administrations and overcoming the constraints posed by lack of electricity and sometimes telecommunication access. 38. what is clear though is that it is not possible to cover a country of a