why what it does is important. many people think of the reserve bank as a mysterious institution, a sort of monolith – doing obscure things that have no real relevance for the everyday lives of people. others think that all that the reserve bank does is print currency, and wonder why, when short of resources, we don ’ t just print more of the stuff. some people think that all that the governor does every day in office is sign currency notes, and that if there is shortage of currency, it is because he is slow in signing. the reality is quite different. we print and distribute currency, of course, but we do a lot of other things besides. we are the monetary authority of the country. we are the gatekeepers of the external sector. we regulate and supervise banks, non - bank finance companies and segments of the financial markets to ensure that the money you keep in banks is safe and is productively deployed towards generating economic activity. our regulation extends also to the payment and settlement systems with the aim of making financial transactions safe, robust and efficient. the reserve bank is also the central bank – that is it is the bank of banks and the bank of the government of india as well as of state governments. on top of all this, and importantly, the reserve bank has a key role in the economic development of the country and drives an impressive social development agenda. that in a nutshell is the range and diversity of responsibilities of rbi. and what we do affects the everyday lives of people across the country from the prices they pay in the market, the interest they earn on their deposits in the bank, the interest that is charged when they borrow money and indeed how the government pays for new roads, schools and hospitals. in my remarks today, i will try and demystify the world of the reserve bank ; i will explain some of its main responsibilities, share with you some of the policy challenges we face, and convey to you above all, how we try to make a difference. production and distribution of currency let me start with currency management – a function that most people are familiar with. an exclusive prerogative to issue currency has in fact become a defining characteristic of central banks. you must have noticed that the currency that you use has on it a promise by the governor of the reserve bank that says that the note that you are carrying is worth what it bis central bankers ’ speeches says. tautological as it might sound, this promise is significant because it enjo

v leeladhar : emerging challenges before the indian banks - the road ahead first annual dena bank foundation day address by mr v leeladhar, deputy governor of the reserve bank of india, to commemorate its founder, the late pranlal devkaran nanjee, mumbai, 26 may 2005. * * * it is indeed an honour to be invited to commence the dena bank foundation day lecture series. today, as we remember the founders, we essentially pay homage to their vision and drive that led to the establishment of the dena bank. shri pranlalbhai nanjee, inspired by his late father shri devkaran nanjee ’ s dream to start a bank and play a seminal role in the development of the indian banking industry, started the devkaran nanjee banking company in january 1938, about three years after the reserve bank was established. it was then incorporated as a private limited company under the indian companies ’ act on 26 may 1938. in a span of twenty five years, the bank grew in size and stature to rank amongst the top 14 banks in india and was converted into a public limited company and renamed as dena bank limited in december 1966. it was nationalized in july 1969 along with 13 other banks in the first phase of bank nationalization in india. today, as the bank is gearing itself to enter the fast changing, turbulent and uncertain environment that characterises the banking terrain, we trust it will pick up the momentum of its first twenty five years. founding days are always very special. they are one of the few ‘ possessions ’ which are owned by each and every one of the institution ’ s fraternity alike. it is not only a day to feel proud, it is a day to reflect, a day to share, and a day to celebrate. it is also an opportunity to re - emphasise what the institution stands for, to renew its symbols, its imagery and its values. these symbols and imagery not only help project its corporate culture and identity, but they also constitute an integral part of the institutions ’ brand building exercise. founding days constitute one of the few opportunities for collective sharing in an institution. the coming together and the camaraderie that this day evokes is perhaps the appropriate moment to reinstate an emotive content into the work place. the emotive content, team building, the ownership in work, how to inspire, how to draw out from the staff the very best, are perhaps new issues in