of board members, senior management are in sync with value demonstration in actions. the board ’ s oversight over compliance function should not be limited to framing policies, and its periodic review. a bank ’ s compliance policy will not be effective unless the board of directors promotes values of honesty and integrity throughout the organisation. the board should also formulate and maintain a quality assurance and improvement program that covers all aspects of the compliance function. accountability – the bank ’ s senior management is responsible for effective adherence to the compliance policy of the bank by the management and staff ; and to for ensuring that compliance risk is minimised. culture of owning the responsibility individually and collectively by board ; clear demarcation of accountability of senior management, functional head and operational head ; role of business unit as first line of defence and role of internal audit as third level of defence in facilitating robust compliance culture are all important. communication : clarity and transparency should be promoted by making a distinction between general standards for all staff members and rules that only apply to specific groups of staff. an effective compliance culture requires continuous communication of expectations on risk and compliance and practices across the bank ; compliance awareness channels for existing and new board members, senior management and employees ; process for containing conduct risk and whistle - blower mechanism. incentive structure : an adequate incentive structure should be in - built in the bank ’ s decision making systems and processes to achieve the desired compliance culture. ex ante and forward looking : compliance is distinct from other assurance functions viz., risk management and internal audit. the focus of the compliance function should be preventive compliance. by definition, preventive compliance would assess the activities of the bank before hand and prevent non - compliant activities / transactions from being carried out. compliance should be an ex ante activity and forward looking. compliance organsiation, authority and resources : a bank should organise its compliance function and set priorities for managing its compliance risk in a way that is consistent with its own risk management strategy and structures. for instance, some banks may wish to organise their compliance function within their operational risk function, as there is a close relationship between compliance risk and certain aspects of operational risk. others may prefer to have separate compliance and operational risk functions, but establish mechanisms requiring close cooperation between the two functions on compliance matters. regardless of how the compliance function is organised within a bank, it should have sufficient authority, stature, independence, resources and access to the board. its responsibilities should be clearly specified, and its activities should be subject to periodic and

the housing loan to gdp ratio would grow sharply in the coming years. size of housing financial systems as a share of gdp in a cross - country perspective [ warnock, veronica cacdac and francis e. warnock ( 2008 ) ] suggest that the emerging market economies generally have a smaller housing financial system averaging to 10 per cent of gdp with the largest being between 20 – 30 per cent of gdp and developed countries accounting for around 55 per cent of gdp. during 2001 – 05, mortgage debt ( housing finance ) to gdp ratio for india was lower at 4. 9 per cent than other developed countries usa ( 67. 4 per cent ), uk ( 66. 6 per cent ), japan ( 35. 7 per cent ), france ( 24. 1 per cent ) and korea ( 20. 8 per cent ), and asian emerging economies like china ( 10. 0 per cent ), malaysia ( 28. 3 per cent ), philippines ( 6. 8 per cent ), taiwan ( 26. 0 per cent ) and thailand ( 15. 5 per cent ). 17. an educated young population gives a head start in today ’ s knowledge economy. in india, they form the backbone of the country ’ s booming service sector. according to a nasscom study, the number of students enrolled for tertiary education in india is close to 10 million. while banks are now regularly extending education loan for courses in india and some banks are also contemplating extending education loans for courses aboard, this is indicative of the growth potential of education loans in india. section 3 : gennext banking life cycle wise products and services available under one roof the indian banks have identified the growth potential of the gen next and are already providing schemes especially keeping in mind the requirements and preferences of the younger generation. as mentioned in the earlier section, the banking sector can help in reaping the “ population dividend ” by providing life cycle wise products and services under one roof. let me elaborate on this. the gennext banks would be offering products and services right from birth till death. the relationship would start with birth when a savings account could be opened. i recall pnb ’ s scheme where soon after birth when devotees visited golden temple, an account was opened for the newly born. then as the child grows, appropriate products and services would be offered at the right time. during infancy, small health and life insurance services could be offered. other features could include recurring deposit and fund transfer from parents to kids account.