let me take a moment to clarify what resilience means. while stability ensures that the financial system can withstand shocks without losing its capacity to function, resilience goes a step further. resilience indicates that in addition to weathering the storm, the financial system is able to adapt to the newer realities and thrive in it3 so that it remains a pillar of trust and stability. 1 / 3 bis - central bankers'speeches to build financial resilience, supervision must be proactive, continuous, forward - looking, and risk focused. an effective banking supervision system requires4 the supervisor to maintain a continuous, forward - looking assessment of the risk profiles of individual banks, aligned with their systemic significance. supervisors must be able to identify, evaluate, and address risks both within individual institutions and across the entire banking system. this also includes having a well - defined framework for early intervention and clear contingency plans to ensure that non - viable banks can be resolved in an orderly and efficient manner. for that, supervisors must possess the resolve to act swiftly and decisively when necessary. in recent years, we have worked to reposition the rbi's supervisory framework to better align with this objective. our supervisory initiatives aim to identify risks and vulnerabilities early, establishing a structured framework for early intervention to mitigate these risks. we have shifted our focus from merely addressing the symptoms of vulnerabilities to identifying and addressing their root causes, while also harmonizing supervisory rigour across various segments of the financial system. we have designed and implemented a calibrated supervisory approach, which provides the flexibility and scalability needed to focus more effectively on high - risk institutions and practices. at the heart of this approach is a proactive off - site surveillance mechanism that enables us to detect emerging risks and assess vulnerabilities across the supervised entities, ensuring timely action to mitigate or manage these risks before they escalate. to further strengthen our supervisory capacity, we are also investing in initiatives such as the college of supervisors, which seeks to enhance the skills and expertise of our supervisory staff. in addition to building capacity, we are increasingly focusing our efforts on improving the risk and compliance culture within supervised entities, ensuring that these institutions not only meet regulatory requirements but also foster a proactive, robust approach to managing risk and compliance at all levels. while we, as supervisors, strive to perform our duties to the best of our abilities, it may be worthwhile to recall what charles goodhart aptly

india is entering the second stage of demographic cycle and over the next half - century, a significant increase in both savings rate and share of working age population is expected. the share of the labour force in population in india is expected to overtake the rest of asia, including china, by 2030. looking ahead, the rest of the world may increasingly rely on china and india for supplies of both labour and capital and this could significantly influence the evolution of the global economy. it is evident that china and india will have to give high priority to generating employment and both are poised for substantial increases in productivity. the global economy will have to contend with the implications of these developments on prices, exchange rates, wages and structures of employment in industrialised countries. over the medium term, it is felt that outsourcing will grow rapidly and may also cover high - end research and development activities. in manufacturing, china has emerged as a leader and india is catching up rapidly. though agriculture is heavily subsidised in major industrialised countries, such subsidisation would be difficult to sustain from a fiscal point of view, since many of the countries concerned are poised to meet the mounting pension liabilities not to speak of burgeoning health care costs of maintaining the deteriorating demographics. one sector where the industrialised economies continue to show considerable strength and dominance is the financial sector, partly attributable to the confidence factor in financial markets that favours the industrialised economies and traditional international financial centres. it is essential for india to carefully monitor the developments in both real and financial sectors, and to frame the policies in tandem with the global developments so that global integration continues to be a positive sum game for all countries. financial integration on the path of integrating the indian financial markets with the global financial system, we have chosen to proceed cautiously and in a gradual manner, calibrating the pace of capital account liberalisation with underlying macroeconomic developments, the state of readiness of the domestic financial system and the dynamics of international financial markets. unlike in the case of trade integration, where benefits to all countries are demonstrable, in case of financial integration, a " threshold " in terms of preparedness and resilience of the economy is important for a country to get full benefits. a judgmental view needs to be taken whether and when a country has reached the “ threshold ” and the financial integration should be approached cautiously, preferably within the framework of a plausible roadmap that is drawn up by embodying