could be a successful mode of credit delivery. hence, there is a need for promotion of self - help groups ( shgs ) with greater linkage with banks. in this regard, nabard has an important role to play, not only in promotion of shgs, but also in capacity bis central bankers ’ speeches building, along with sidbi and concerned state government agencies. another area where there is substantial scope for expansion is low - cost housing. expansion of housing loan remains poor as mortgages cannot be created in many parts of nes. however, banks can explore innovative structures for housing loans with a greater emphasis on group lending. seventh, in any plan for financial sector development, the physical presence of a bank branch is important. but the topography of the region, the dispersal of population, transport bottlenecks and law and order conditions in some areas inhibit branch expansion other than in certain commercial centres. hence, all the stake - holders – banks, state governments and the reserve bank – need to work in close co - ordination for increasing banking penetration and promoting financial inclusion in the region. conclusion to conclude, the north - eastern region has immense potential. the need, therefore, is to identify the opportunities and recognise the challenges to work towards a sustainable and inclusive growth of the region with greater penetration of the formal financial sector. bis central bankers ’ speeches

simulating policies have helped in reducing risk in the short run, but they cannot address structural changes, which have been noted from times now or which are directly related to the pandemic. a “ new normal ” is expected to guide the need for the adaption of the private sector and a re - thinking of the institutional government paradigms. 2. challenges of the future policy - making institutions are expected to tackle complex structural challenges, which will determine the shape and content of a new reality within a not too far future. the increase of barriers in international trade, the population ageing, international migration, decrease of innovation, global warming, the growth of inequality and increasing social tensions, are critical global issues. public authorities, in their response, should engage, without losing time, in coordinated structural reforms – among others – bolstering innovation and reallocation of sources among the sectors of economy, free trade, stability of pensions system and maintenance of social consensus. further, a “ new normal ” would call for a prudential coordination of public policies, for reaching an optimum balance between the economic growth and the economic, monetary and financial stability. allow me to elaborate somewhat further on this issue. the global financial crisis and the pandemic renewed attention to the indispensable role of fiscal policy : an instrument for the stabilisation of the economy and mitigation of crises. this lesson is expected to be relevant – both in medium - term and long - term - by paving the path to a more active role of fiscal policy in the future. nevertheless, it should in no case skip the need for preserving the fiscal stability. in contrary, fiscal stability remains a precondition to long - term 2 / 4 bis central bankers'speeches growth and enables the establishment of the necessary premises for the amortisation of shocks. in the area of central banking, the “ new normal ” will continue to be characterised by a flatter phillips curve, where wages, employment or economic growth will continue to have a weak relation to inflation. challenges to maintaining price stability will continue to be present. it dictates the need for the improvement of transmission mechanism of monetary policy by making indispensable the exploring of unconventional instruments as feasible and valuable alternatives for managing future shocks. all these challenges lead to the need for enhancing the flexibility of public institutions making them more able to evolve, adapt to changes around them, and to boost innovation. in this context, i am proud that the bank of