financial institutions, including cdfis, provided more paycheck protection program ( ppp ) loans to borrowers in low - and moderate - income communities and majority - minority communities than their traditional counterparts. 3 growth in demand for cdfi products and services therefore, it is encouraging to see that the industry is growing both in terms of number of certified cdfis and total assets held. from 2018 to the start of 2023, the number of certified cdfis rose 40 percent and assets have nearly tripled, according to research from the federal reserve bank of new york. 4 interest in cdfi products and services also continues to grow. the federal reserve bank of richmond's 2023 cdfi survey indicates that nearly three - quarters of cdfi respondents experienced an increase in demand for their products from 2022 to 2023. 5 2 / 5 bis - central bankers'speeches cdfis are especially adept at leveraging capital - with some programs leveraging $ 8 in private - sector investment for every $ 1 of public funding. 6 that leverage helps meet this growing demand. despite growth in demand, many cdfis still face challenges in today's economic environment, especially as it relates to meeting the needs of the communities they serve. i emphasize that the communities cdfis serve are ones that were disproportionately impacted by business and school closures as well as negative health outcomes resulting from the pandemic. they also have been among the most affected by recent inflation. i would like to highlight three specific issues that cdfis are struggling with, as identified by the federal reserve bank of richmond's cdfi survey. first, demand is outpacing the supply of capital. while there has been an influx of federal funding for cdfis, much of that is tied to pandemic - related relief programs and other programs with specific purposes. therefore, building out long - term sources of capital is a continuing challenge. one hopeful strategy is selling loans on secondary markets. new research from the federal reserve bank of new york shows that cdfis sell billions of dollars of loans each year but tend not to do so systematically. also, residential mortgage loans account for almost all the volume sold by cdfis. as such, there is likely substantial room for growth. 7 later in today's program, you will hear more about opportunities for cdfis to explore options, such as pooling and securitizing loans to expand their access to capital

functioning of the payment and settlement system is a pre - requisite for financial stability. the introduction of rtgs and setting up of the ccil which acts as a central counterparty for securities and forex transactions and guarantees both the securities and funds legs of the transaction have enhanced the efficiency of the payments mechanism. • in terms of the processes also, certain interesting features of the reforms are in evidence. the first has been its gradualism, wherein reforms were undertaken only after a process of close and continuous consultation with all stakeholders. this participative process with wider involvement not only encouraged a more informed evaluation of underlying content of policies but also enhanced the credibility of policies and generated expectations among economic agents about the process being enduring in nature. there has been a constant rebalancing of reform priorities predicated upon the domestic and global business environment, institution of prudential practices, upgradation of the regulatory and supervisory framework, institution of appropriate institutional and legal reforms and the state of openness of the economy. impact of reforms in the banking sector ( i ) performance indicators various measures initiated over the last decade - and - a half have significantly strengthened the commercial banking sector in terms of profitability, asset quality and capital position. the soundness parameters of the banking system, in particular, have shown sustained improvement. the asset quality of the indian banking system has improved significantly over the past one decade. the npas of all scbs, which stood at 15. 7 per cent of gross advances and 7. 0 per cent of total assets in 1995 - 96, declined to 3. 3 per cent of gross advances and 1. 9 per cent of total assets in 2005 - 06 ( table 1 ). similar trend can also be seen in the net npas ratios during the same period, reflecting better recoveries by banks and better allocation of funds. there has been a distinct improvement in the recovery climate in recent years facilitated by strong macroeconomic performance and institutional measures initiated by the reserve bank / government. it is also significant to note that the asset quality of public sector banks has been better than private sector banks – both old and new – in terms of net npl ( i. e., net of provisioning ). the financial performance of scbs had also improved during the recent past as reflected in their profitability. the operating profit to assets ratio of scbs, which was 1. 69 in 1995 - 96, increased to 2. 03 in 2005 - 06 ( table 2 ). net