offering of customized products etc address the supply side factors while the financial literacy initiatives address the demand side factors by sensitizing the people of the need for and benefits of joining the formal financial system. ucbs, by their structure and nature of clientele, are well designed to cater to financial inclusion. the very basis of co - operative structure is mutual help and thrift. considering the specific features of ucbs such as their organizational structure ( member driven ), clientele, easy access and reputation as a friendly neighbourhood bank, these highly localised institutions have the potential for widening and deepening financial inclusion in their area of operation. measures undertaken to promote financial inclusion it has been rbi ’ s endeavour to remove all hurdles in the way of its regulated entities in achieving financial inclusion objectives. some of the salient measures undertaken in this regard are : bis central bankers ’ speeches introduction of new products ( i ) opening of “ no - frills ” accounts : a “ no frills ” account is one for which no minimum balance is insisted upon and for which there are no service charges for not maintaining the minimum balance, introduced as per rbi directive in 2005. banks have been advised to provide small over drafts in these “ no frill ” accounts. ( ii ) general credit cards ( gcc ) / kisan credit cards ( kcc ) : gccs / kccs help purvey credit where the credit facility is in the nature of a revolving credit entitling the holder to withdraw up to the limit sanctioned., limits are sanctioned without insistence on security or purpose, based on the assessment of household cash flows. interest rate on the facility is completely deregulated. relaxed regulatory requirements i. relaxed regulatory dispensation on know your customer ( kyc ) norms : kyc requirements for small accounts were relaxed in august 2005, by stipulating that introduction by an account holder, who has been subjected to full kyc drill, would suffice for opening such accounts, or, that the bank can take any evidence to its satisfaction as to the identity and address of the customer. during the year, it has been further relaxed to include job card issued by nrega duly signed by an officer of the state government or the letters issued by the unique identification authority of india containing details of name, address and aadhaar number as a valid identity proof. ii. simplified branch authorisation : to increase the reach of banking network, domestic scheduled commercial banks have earlier been permitted to

ishrat husain : the asian clearing union welcome address by mr ishrat husain, governor of the state bank of pakistan, at the inaugural ceremony of the 34th annual meeting of the board of directors of the asian clearing union ( acu ), lahore, 16 may 2005. * * * it is a great honour for the state bank of pakistan to host the 34th annual meeting of the board of directors of the asian clearing union. i welcome you all to pakistan and wish you a pleasant and productive stay in our country. it is also indeed a pleasure for me to welcome the guests from afghanistan and the maldives monetary authority, who are attending this conference as observers. we all are familiar with the purpose and background of the asian clearing union. we have also reviewed each year the progress that was made and problems that our members had faced in international trade and payments and tried to modify the coverage, mechanism and procedure of the asian clearing union. what i wish to emphasize today is that major changes have taken place in the international scene during the last one year which necessitates our taking a closer look at the record and relevance of the asian clearing union in relation to fast changing global environment. in the rapidly changing environment, in which regional grouping is becoming a vehicle for trade promotion and economic co - operation, the asian clearing union should revisit its charter, examine its relevance and find ways to expand the intra - regional trade and economic co - operation in a multilateral context. we have to be outward looking and our objective should be to bring about coherence and consistency in our macroeconomic policies that attract direct foreign investment. the annual report of acu for the current year ( 2004 ) indicates that even though intra - regional trade is growing, the operations through the asian clearing union are limited. our efforts to expand its membership have not as yet succeeded. however, i may add here that the acu has not experienced a default. although there have been persistent debtors in the acu system, their negative net balances have not been large. there has not been a " structural creditor problem " in the acu. i would like the governors to give some thought as to how we can make asian clearing union an important vehicle for the expansion of intra - regional trade and further economic coordination, and how our banking and financial markets could be made complementary for the maximization of economic welfare of the member states. asian countries have demonstrated during the last several decades that it is possible