reasons to remain confident with regard to growth prospects. on the external side, euro area export growth should benefit further from the expansion of the global economy. considering these factors together, the growth dynamic in the euro area can be expected to be maintained in the coming years. forecasts by international and private organisations currently project euro area real gdp growth in the coming one to two years to be somewhat lower than this year ’ s more than 3 %, but to remain at around 3 %. the exchange rate of the euro has remained a cause for concern. the depreciation of the euro during 1999 and 2000 has added to upward pressures on consumer prices in the euro area. the exchange rate of the euro has now remained out of line with economic fundamentals for a prolonged period of time. the g7 expressed concern about the global repercussions of the current level of the euro exchange rate. in order to support the euro, concerted interventions by all g7 members, on the initiative of the ecb, took place on 22 september, and the eurosystem intervened several times in november. recent harmonised index of consumer prices ( hicp ) inflation rates have been higher than could have been expected only a few months ago. current inflation reflects the unexpected sharp rise in oil prices in recent months. notwithstanding a possible decline in oil prices, annual hicp inflation rates are likely to remain above 2 % for some time to come. it needs to be recognised that current upward pressures on consumer prices can be alleviated most smoothly if economic agents see them for what they are, namely one - off or temporary price increases resulting from external factors. in this respect, when forming their expectations, economic agents should count on the commitment of the governing council of the ecb to maintaining price stability, defined as hicp inflation below 2 %, in the medium term. monetary policy will not accommodate inflationary tendencies in the euro area. it will be critical to ensure that the temporary upward pressure on hicp inflation is not followed by more lasting upward pressure from domestic factors. the interest rate measures taken by the ecb over the past few months were aimed at containing the emergence of inflation expectations and convincing the social partners, as well as the public at large, that price stability in the euro area will be maintained. by ensuring that wages continue to grow at a moderate pace in 2001 and, may i add, beyond next year, wage - setters would facilitate the ecb ’ s task of maintaining price stability. they would

##s, where cash withdrawal is not permitted as of now. however, we are considering the cash withdrawal from such wallets subject to certain legal / statutory clearances. however, mobile banking has not picked up in a big way due to constraints of mobile numbers registration, user authentication, user interface etc. 24. reserve bank had recently set up a technical committee on mobile banking ( chairman : shri b. sambamurthy ) to examine the operational as well as technical issues and challenges faced presently by banks in leveraging upon mobile density and advancements in mobile technology to meet the objectives of financial inclusion. in india, despite high mobile density, it is also a reality that most of these handsets are basic ones and many of these connections belong to the category of prepaid subscription base. these constraints cannot be lost sight of if mobile technology has to be harnessed as the medium to deliver basic financial services to large masses. 25. this committee has recommended interalia, the need for a standardised and simplified procedure for registration / authentication of customers for mobile banking services, a cohesive awareness programme to be put in place, adoption of common application platform across all banks to be delivered to the customers independent of the handset being used along with use of sms and ussd technology for providing necessary level of security ( through encryption ) for such transactions. 26. in this context, inter - regulatory cooperation has also been underscored through the issuance of necessary guidelines by the telecom regulatory authority of india which has prescribed the optimum service parameters as also ceiling on transactional cost for extension of the ussd services by telecom operators to the banks and their agents. the efforts already taken by npci for a common ussd gateway for banks can now be taken forward towards fruition. here is a great opportunity for very important stakeholders – banks and telecom service providers – to come together to deliver the mobile banking services in a seamless and secure manner to their customers. let me make a suggestion. to start with, for mass application of the handheld devices for payment of bills, why not we integrate gas booking for residences with mobile technology for payment. this would eliminate payment of bis central bankers ’ speeches cash to the dealers, which is a great carry risk. there could be many more such applications but gas payments could be a significant step to inculcate the mobile payment culture. 27. in the context of mobile banking, the following questions still remain without satisfactory answers : ( a ) given the recent developments and the enabling conditions