, but i thought it would be more effective if we engage with all the directors together. it is the joint responsibility of the chairman of the board and the directors, both whole time as well as non - executive or part time directors, to ensure robust governance in banks. ii. ensuring requisite qualification and expertise in the board 7. the banking regulation act prescribes certain qualifications for appointment as directors in the board of banks. additionally, the reserve bank has issued guidelines on the ‘ fit and proper ’ criteria for the directors. the objective is that board members should have requisite expertise and demonstrate competence and integrity. for this, it is of utmost importance that the directors keep themselves updated with material changes in the bank ’ s internal environment as well as the external factors that have a bearing on the bank. a balanced combination of skills, diversity and expertise commensurate with the size, complexity and risk profile of a bank is what will drive it towards sustainable resilience. these skills should be enhanced by ongoing orientation programmes for the directors. directors must exercise care, prudence and diligence in the discharge of their functions. duty of loyalty implies an undivided and unselfish loyalty to the bank and demands that there shall be no conflict between duty and self - interest6. iii. objective and independent board 8. individual directors should not have any conflict of interest which may hamper their objectivity and independence. it is the responsibility of the board to ensure that policies are in place to identify potential conflicts of interest and deal with them. in this respect, it is necessary that ‘ independent ’ directors are truly independent ; that is, independent not only of the management but also of controlling shareholders while discharging their duties. they have to always remember that their loyalty is to the bank and no one else. directors should keep watch on actual or potential related party transactions. they are expected to ask pertinent questions and obtain the required information from the management before taking decisions. i am not advocating any the corporate governance of banks, jonathan r. macey and maureen o ’ hara, frbny economic policy review / april 2003 confrontation, but only stressing the need for the required level of alertness among all directors. iv. role of chairperson, board committees and managing director / chief executive officer 9. the role of chairperson is akin to the captain of a ship. for the chairperson to be able to navigate the board discussions and functions in the right direction, he / she should

##oquence in several fora – including the g30 conclaves. in my brief address today, i will make a few observations on india ’ s prospects for growth with stability in both short and medium terms, by highlighting a few important aspects. during the discussion that follows, we could interact on the major focus, as well as specifics, that is of interest to the gathering today. short - term prospects for policy purposes, real gdp growth has been estimated to be in the range of 8 to 8. 5 % for the year 2008 - 2009 ( year ending march 2009 ). there are several reasons why this expectation is realistic. over the last five years, the indian economy has expanded on an average at 8. 7 percent per annum. in fact, gdp growth was 9. 6 percent in 2006 - 2007 and has moderated to an estimated 8. 7 percent in 2007 - 2008. this moderation is partly attributable to preemptive monetary policy actions that sought to dampen excessive demand pressures, while continuing with enabling environment to enhance supply - side responses in terms of investments. while there is a growing importance of global factors, india ’ s growth is mainly driven by domestic demand and supply factors. gross domestic savings continue to be around 35 % of gdp and available evidence points to continued increases in productivity. the realisation of the expected growth in the current year assumes normal monsoons and a slow - down in global growth by not more than what is currently assessed. monetary policy in india accords appropriate priority for price stability in recognition of its significance for the large segment of the poor who have no hedge. further, the policy recognizes that high growth benefits the poor with a lag, while inflation adversely affects them instantly. hence the current high - level of inflation is totally unacceptable, especially in terms of impact on inflation expectations. the monetary policy, however, reckons the complexities of the current bout of inflation. accordingly, the recent emphasis is on liquidity management with option to take recourse to all other measures, as necessary, so that demand pressures are contained consistent with supply - side responses from the markets and from the central and the state governments. the annual policy plans for a reduced rate of money supply in the range of 16. 5 to 17 % in 2008 - 2009, while correspondingly placing growth of non - food credit at around 20 %. as per indications, the currently elevated level of the wholesale price index may start moderating noticeably as monetary