macro - prudential policies counter - cyclical policies 12. implementation of countercyclical capital and provisioning regulations in india during the period from december 2004 to december 2010 is reflected in table 1 below. y. v. reddy ( 2011 ). bis central bankers ’ speeches 13. table 2 indicates the movement in monetary measures as well as the movement in the provisioning norms and risk weights of the specific sectors during the three phases of implementation of the countercyclical policies. 14. the period covered in table 2 is divided into three distinct phases from monetary policy perspective which correspond to three phases from countercyclical policy perspective. the monetary tightening and easing phase corresponds respectively to increase in sectoral capital and provisioning requirements ( build up phase ) and easing of these requirements ( release phase ). the period wise classification from this perspective is : – ( i ) build - up phase : september 2004 – august 2008, ( ii ) release phase : october 2008 – april 2009, and bis central bankers ’ speeches ( iii ) re - build - up phase : october 2009 till date. it may be noted that the monetary and countercyclical measures have always been in the same direction i. e. have been complementary so far. build - up phase : ( september 2004 – august 2008 ) 15. during 2004 – 08, the indian economy exhibited high real gdp growth, of around 9 per cent per annum. given the high growth and inflationary pressures, monetary policy was in a tightening mode to contain aggregate demand and inflation. during this period, india also received large capital flows, which were intermediated by the banking sector. high growth created a huge demand for bank credit. while the overall bank credit growth accelerated sharply ( to over 30 per cent ), credit growth to certain sectors such as real estate accelerated much more sharply ( reaching more than 100 per cent, year - on - year, for an extended period april 2005 – july 2006 and remained above 50 per cent till later than mid - 2007 ). concomitantly, asset prices, especially those of real estate, rose sharply. this exposed the banking sector to huge risks. in view of the rapid credit expansion in the period 2003 – 06, it was explicitly indicated by the rbi in april 2006 that growth of non - food bank credit, including investments in bonds / debentures / shares of public sector undertakings and private corporate sector and commercial paper, would be calibrated to decelerate to around 20 per cent during

the guidelines for account aggregator ( aa ) in 2016, are examples rbi's proactive developmental role. the focus of the digital lending guidelines ( dlg ) on fair treatment of customers demonstrate the prioritisation of innovation with suitable guardrails. it is important to recognize that regulation plays a crucial role in managing the pace of change and allows the financial system to adapt to new innovations without threatening the stability of the system. self - regulation as regulators continue to contemplate, implement, and refine regulations for the orderly development of the fintech sector, self - regulatory organizations ( sros ) could play a pivotal role in the fintech industry by promoting responsible practices and maintaining ethical standards. these industry - led bodies establish guidelines and codes of conduct that foster transparency, fair competition, and consumer protection. sros can facilitate collaboration between fintech firms, regulators, and stakeholders, creating a framework for innovation with guardrails. by proactively addressing issues like market integrity, conduct, data privacy, cybersecurity, and risk management, sros help build trust among consumers, investors, and regulators. their voluntary compliance mechanisms contribute to a more sustainable and reputable fintech ecosystem, ensuring growth while minimizing potential risks and negative outcomes. in the context of a new and evolving sector like fintech, it is the industry participants who possess the deepest understanding of the processes and practices within the trade. therefore, they are bestsuited to establish common rules, enforce them, and effectively handle disputes that may arise from non - compliance with these rules. conclusion in conclusion, it is crucial for fintechs to continue collaborating and innovating to enhance the effectiveness of the financial sector. collaborating and competing with fintechs is essential for traditional financial entities too, in order to adapt. while innovation is vital, it should also support social and economic goals. regulation should play the role of guiding the sector to those goals. self - regulation needs to play a far more active role too. together, industry participants – fintech and banks alike -, regulators, and self - regulatory organizations can work harmoniously to shape a vibrant and resilient financial landscape that promotes inclusivity and progress for all. 3 / 4 bis - central bankers'speeches thank you for your attention and wish you all the best. 1 chapter 7 : extracting value through the innovation economy in the value of everything by mariana mazzucato 4 / 4 bis - central bankers'speeches