. the first phase of fips was implemented over the period 2010 – 2013. the reserve bank has sought to use the fips as the basis for fi initiatives at bank level through certain measures : – banks advised to prepare board approved fips for the period 2013 – 2016. – rrbs also advised to prepare comprehensive fips, consequent to their migration to cbs in 2011. – in order to ensure closer monitoring of fi performance of bank branches, banks have been advised to disaggregate their fips up to controlling office and branch level. – structured, comprehensive monitoring mechanism put in place by rbi for evaluating banks ’ performance against their fip plans. annual review meetings are being held with cmds of banks to ensure top management support and commitment to the fi process. in the annual policy statement for 2013 – 14, banks have been advised to consider frontloading ( prioritizing ) the opening of branches in unbanked rural centres over a three year cycle co - terminus with their fips. this is expected to facilitate the branch expansion in unbanked rural centres. after successful achievement of the target of ensuring provision of banking services through a banking outlet in every village with population above 2000 by march 2012, bis central bankers ’ speeches slbcs were advised to prepare a road map for provision of banking services in all unbanked villages with population below 2000 in a time bound manner. under the road map, slbcs have identified about 485000 unbanked villages with population less than 2000 and the same have been allotted to banks. an integrated approach has been adopted for achieving financial inclusion through financial literacy. financial literacy centres and rural branches of scheduled commercial banks have been advised to conduct outdoor financial literacy camps at least once a month. in order to ensure consistency in the messages reaching the target audience of financially excluded people through these financial literacy camps, the reserve bank has released a comprehensive financial literacy guide containing guidance note for trainers, operational guidelines for conduct of financial literacy camps and financial literacy material. in order to ensure smooth roll out of the government ’ s direct benefit transfer ( dbt ) initiative, banks have been advised to : – open accounts of all eligible individuals in camp mode with the support of local government authorities. – seed the existing and new accounts with aadhaar numbers. – put in place an effective mechanism to monitor and review the progress in implementation of dbt. emphasis is on increasing the proportion of brick and mortar branches vis - a - vis bc outlets. the

products and services and selling them to inappropriate customers could expose banks to litigation and reputational risks, besides making them liable for supervisory action. there should be no unreasonable post sale barriers if the customers wish to change product or bank. customer education is also critical in providing appropriate and need based products and services and the indian banks ’ association may have a critical role to play in this regard. the banking business would, thus, have to turn customer centric in all its true dimensions. financial sector reforms – what next? the indian approach to financial sector reforms, so far, has been driven by the predominant objective of enhancing the role of finance in promoting growth and economic development, bis central bankers ’ speeches while preserving financial stability, which is equally critical for sustained economic progress. while balancing the goals of efficiency and stability in introducing reforms, the reserve bank has moved towards deregulation of interest rates, promoted development of markets, and strengthened the legal infrastructure to facilitate better enforcement of financial contracts. going forward, three areas will continue to be important in policy debates, i. e., development of long - term corporate bond markets, derivative markets to facilitate better price discovery and risk transfers, and more competition by allowing greater foreign participation. the regulatory and supervisory framework of the financial system across the world is undergoing a paradigm shift following the problems experienced during the global financial crisis. in this regard, multilateral and standard setting bodies like the g - 20, imf, bis and fsb have been in the forefront to design an advanced regulatory framework to prevent the recurrence of such crisis. addressing the regulatory gaps based on the lessons from the global financial crisis in advanced economies will be a major challenge for regulators all around the world. much of the challenges in the domain of financial stability regulation would arise from complexities surrounding the assessment of systemic risk, interconnectedness, common exposures, risk concentrations in complex innovative products and use of models to manage and price risks which, at times, mask information. while india ’ s financial sector remained resilient in the face of global shocks, there are a number of areas where the reforms would be needed to promote stability and generate growth impulses for the real economy. in the wake of turbulent global financial environment, banks and financial entities have to grapple with growing complexities and risks associated with their businesses. against this backdrop, the policy initiatives such as adoption of tighter capital and liquidity standards, improved risk management practices and sound compensation practices are required to place the indian banking system