bank of japan ’ s june report of recent economic and financial developments in japan bank of japan, communication, 16 / 6 / 98. the bank ’ s view1 final demand remains weak and production continues to decline in japan. as a consequence, employment and income conditions have recently shown a significant deterioration. with respect to final demand, public - sector investment seems to have bottomed out. growth in net exports, however, has virtually peaked out as exports to other asian countries declined. business fixed investment continues to be on the decline. private consumption shows little sign of recovery, although the deterioration has slowed. housing investment has decreased further. against the background of weak final demand, inventories have accumulated further and industrial production continues to decrease. as a result, corporate profits have worsened, and employment and income conditions have deteriorated evidently, as seen recently in the rapid rise of the unemployment rate. as for the outlook of the economy, the implementation of the supplementary budget for fiscal 1998 is assumed to boost demand through additional public works and special income tax - reduction, and cease the negative interactions of production, income, and expenditure. however, such positive effects of the fiscal policy may be weakened, if the ongoing rapid deterioration in employment and income conditions further dampens the overall economic activities. therefore, the overall economic activities, including corporate and household confidence, should be carefully monitored. with regard to prices, wholesale prices continue to fall and consumer prices ( excluding the effects of institutional changes ) have declined slightly below the previous year ’ s level. with respect to the factors affecting the outlook, the downward pressure on domestic prices induced by the decline in import prices including overseas commodity prices has already weakened. also, the expansion in the output gap in the economy is expected to slow in line with the implementation of the economic stimulus package. however, reflecting the present high inventory level and the relatively large output gap, prices are likely to be weak for some time. there may also be additional downward pressures if domestic demand weakens further. as for financial markets, rates on term instruments ( for both spots and futures ) have been generally steady in the money markets. yields on long - term government bonds recorded historical lows from late april to early june with the releases of weak economic indicators, and are recently showing a slight turnaround. stock prices have been slightly declining, indicating the weak market sentiment on the economy. market concern towards credit risk remains strong, and the yield differential between bonds issued by the private sector and those by the government has been significant

y v reddy : use of technology in the financial sector - significance of concerted efforts address by dr y v reddy, governor of the reserve bank of india, at the banking technology awards function 2006, at the institute for development and research in banking technology, hyderabad, 2 september 2006. * * * shri arvind sharma, director, idrbt, members of the governing council of the idrbt, fellow bankers and distinguished guests, it gives me immense pleasure to be here with friends from the banking fraternity. in fact, being here is part of my annual pilgrimage to the institute for development and research in banking technology ( idrbt ). at the outset, i would like to compliment the governing council, faculty and staff of the idrbt for continuing with their mission with distinction. the foundation for large - scale induction of it in the banking sector was provided by the recommendations of the committees headed by dr. c. rangarajan, in 1984 and 1989. subsequently, in 1994, the reserve bank constituted a committee on'technology upgradation in the banking sector '. the committee made a number of recommendations covering payment systems including setting up of an autonomous centre for development and research in banking technology. the idrbt was created as a sequel. the institute has established and operates the indian financial network ( infinet ), performs research in banking technology and provides consultancy services apart from providing educational and training facilities for the banking sector. in my remarks today, i would like to highlight the need for concerted efforts to enhance the use of technology in the financial sector to ensure efficiency, stability, competition and above all service to the common person. technology and the rbi i would like to enumerate for record a few technology - related initiatives of the rbi. first, the establishment of the mechanised cheque processing systems using the magnetic ink character recognition ( micr ) technology in india. these have been acknowledged the world over as systems which have stabilised well with overall reject rates of around 1 % while, i understand, that the international rates are around 2 %. those who operate these systems, therefore, deserve to be complimented. second, the technological infrastructure created by the idrbt since the establishment of the infinet in 1999. this was aimed at sharing expensive it resources so as to achieve the economies of scale. one of the notable achievements of the idrbt has been the implementation of public key infrastructure ( pki ) - based electronic data transfer with very