##vi is situated right in the heart of mumbai, the most banked city in the country, and adjoins the bandra - kurla complex, mumbai ’ s financial district, it did not have a commercial bank branch for a long time, notwithstanding its celebrated entrepreneurial spirit and export performance. the first commercial bank branch was opened in february 2007. in just three years, the bank registered business in excess of rs. 44 crore. enthused by this success, one more bank has opened a branch in dharavi and many more are eager to do so. there are now 9 atms in dharavi, all of them being actively used. how does the other half live? 10. the reality is that money management is a well - understood part of everyday life of the poor, and therefore a key factor in determining their coping strategies. some of you may have come across this recent, thought provoking book, “ portfolios of the poor : how the world ’ s poor live on $ 2 a day ” by daryl collins et al. most books on poverty and development, as we know, are “ big picture ” books that tend to take an aggregate view based on anecdotal evidence or at best statistical work. this book strikes a refreshingly distinct path. what the authors have done is to zoom in on the basics of daily poverty to explore how poor people manage their money. let me cite a paragraph from the review of the book in the new yorker : ten years ago, the authors of this unusual study began collecting detailed yearlong “ financial diaries ” from households in bangladesh, india, and south africa, with a focus on those living on less than two dollars a day per person. they found, to their surprise, that none of the families lived hand to mouth ; even the poorest relied on complex combinations of financial strategies, including joining savings clubs, buying funeral insurance, and acting as “ money guards ” for neighbors. these people did things that might seem irrational – borrowing in order to save ; paying interest on savings – but that made sense given their unpredictable incomes and limited options. 11. the dharavi example that i cited earlier is an illustration of how banking the unbanked can be a win - win opportunity. this book is further evidence of the sophistication with which poor people think about their finances. it also demonstrates how bringing them within the fold of formal banking can “ make a difference ” to their coping strategies. financial inclusion

so called prize winning schemes where names of prominent institutions are being used to lure remittances of large amounts of money by promising millions in return. i am informed that these monies are often being paid into banks ’ accounts by gullible people and then siphoned out. even if such accounts are opened after following kyc norms, the unusual pattern of these transactions can be easily discerned if banks use appropriate technologies for this purpose. it is in this context that in our monetary policy statement for 2010 – 11, we proposed setting up a working group on information security, electronic banking, technology risk management, and tackling cyber frauds. 25. next on my list is the several ways it models can be used to improve the efficiency of banking – for example, for credit appraisal using the score card model, for determination of provisioning to be made against loans and for handling millions of low value accounts without compromising on underwriting and supervisory standards. 26. last, and possibly the most important on my list of priority issues is the need to guard against what can be called a “ technology barrier ” between the bank and the customer. as we all recognize, technology is a great enabler and provides us huge opportunities for making banking more efficient and more inclusive. at the same time, it is also faceless, and this absence of a “ human touch ” can be quite intimidating, if not threatening, to those just entering the banking network. banks should, therefore, take extra care to ensure that the poor are not driven away from banking because the technology interface is unfriendly. this requires training the banks ’ frontline staff and managers as well as business correspondents on the human side of banking. idrbt as facilitator 27. before i close, i will be amiss if i do not acknowledge the impressive contribution of idrbt to “ techno - banking ”, if i may use such a phrase now. idrbt ’ s initiatives in developing the infinet, its contribution to the establishment of a messaging platform ( sfms ) and a shared atm - network ( nfs ) have added immense value to our banking sector. idrbt ’ s performance as a certification authority, as an r & d centre and as an institution for training and education have marked great advances in the indian financial sector. 28. the rangarajan committee which had gone into the issue of repositioning idrbt for the next decade has since