by individuals saw a steep decline from 77 % to 51 %. the declining share of individuals in deposits, both in terms of number and amount reinforces the fact that banks have been losing their focus on smaller customers and are increasingly moving towards servicing bigger clients. over the period 1994 – 2012, the number of very small credit accounts ( limit upto ₹25000 ) saw a decline from around 55 million to 44 million despite the total number of credit accounts increasing by 119. 4 % over this period. the outstanding credit in these accounts as a proportion of total credit also declined from 18. 3 % to a mere 1. 6 %. similarly, proportion of amount outstanding in small loans upto ₹0. 2 million to total loans also declined from 30. 5 % to 9. 5 % during this period. the decline in smaller loan accounts, which often cater to the needs of the poor and marginalized sections of the society, again highlights the fact that banks have largely focused on catering to the needs of the bigger borrowers, which is against the principles of allocational efficiency. predictably, the proportion of amount outstanding in high value loans ( limit > ₹1000 mn ) increased from 10 % to 31 % during this period. 25. a similar analysis in case of term deposit accounts reveals that the proportion of accounts with deposit less than ₹0. 1 mn declined from 93. 6 % to 73. 7 % between 2002 – 2012. importantly, the proportion of amount involved in such deposit accounts saw a sizeable decline from 46. 8 % to 10. 9 % during this decade. based on the above trends in credit and deposit accounts, it is fair to conclude that banking in india has been increasingly oriented towards wholesale business. it appears to be losing its focus on retail and small value business. here, i would like to remind our bankers that one of the lessons from the global financial crisis was that small value and retail business proved to be a source of stability and that banks focusing heavily on wholesale business were the most severely impacted in the crisis. what has not happened? 26. from the above data on various parameters, it is apparent that improving efficiencies in the indian banking system have not had the desired beneficial impact on all segments of the population. this clearly implies that allocational efficiency has not kept pace with operational efficiency and, in fact, i may say that operational efficiency has been achieved at the cost of allocational efficiency. the gains from improving operational efficiency have not reached

mr duisenberg reports on the current position and future prospects of the european system of central banks keynote address to the president of the european central bank, dr w. f. duisenberg, at a conference organised by the royal institute of international affairs on european economic and monetary union markets and politics under the euro in london on 27 / 11 / 98. introduction ladies and gentlemen, i should like to express my appreciation at being invited to deliver a speech at this conference organised by the royal institute of international affairs. it is a great pleasure for me to be here, in london, today. the topic i am going to address relates to the current position and the future prospects of the european system of central banks. i feel that this topic provides me with an opportunity to deal with the objective of the escb and its contribution to the other policies in the community. i will also briefly touch upon the decision - making in the escb, recall the main features of our monetary policy strategy and talk about our regard for openness and transparency. the final part of my talk will cover the views of the escb on recent economic developments and the future outlook for price stability in the euro area. independence, transparency and accountability in the maastricht treaty the escb has been given an independent status. the reason is that politicians all over the world have come round to the view that monetary policy decisions taken with too close a political involvement tend to take too short a time horizon into consideration. the consequence is that in the longer term such decisions do not support sustainable gains in employment and income, but only lead to higher inflation. this view is confirmed by a host of economic research. independence, however, requires a clear mandate. the escb has such a mandate. its primary objective is to maintain price stability. without prejudice to the objective of price stability the escb will support the general economic policies in the community. price stability is not an end in itself : it creates the conditions in which other, higher - order, objectives can be reached. in particular, i share the deep concerns about the unacceptably high level of unemployment in europe. the escb will do what it can to contribute to the solution of this problem. by maintaining price stability inflation expectations and interest rates can be kept at a low level. this creates a stability - oriented environment which fosters sustainable growth, a high level of employment, a fair society and better living standards. moreover, in specific circumstances, if production, inflation and