##t has already established a corpus fund with a seed amount of rs. 50 lakh to promote higher education and research in banking technology and management as a core area. banks and other financial institutions are expected to contribute significantly to the growth of this fund. it is customary to devote a memorial lecture to a theme, which has fundamental significance and contextual relevance. after consulting with the organisers and keeping in view the interests of the rbi, the subject chosen for this occasion is : ” reviving confidence in the indian economy ”. it is necessary to recognise that india remains one of the best performing economies in the world, in spite of the current indications provoking a debate on the need for revival of the economy. it can be gathered from the analysis that it is important to revive confidence in the economy in any attempt to improve the performance. an approach in this regard can be discerned from the latest annual report of the rbi. in the true spirit of philosophical explorations and interpretations propounded by dr. sarvepalli radhakrishnan, the concluding part of the lecture will be devoted to select structural issues critical to restoration of confidence in the indian economy. performance of indian economy india today is rated as the fifth largest economy in the world, measured in purchasing power parity terms. only the u. s., chinese, japanese, and german economies are larger than ours. in terms of gross domestic product ( gdp ) growth rates, india was one of the ten fastest growing economies in the world during the ‘ eighties, and moved up to the eighth fastest during the period 1980 to 1998. in regard to growth of gdp in per capita terms also, india's performance during the period is among the top ten. furthermore, on the basis of data on income or consumption distribution ( world development report 1998 - 99 ) for about 80 countries, and using both the ‘ gini ’ coefficient and the share of the poorest 20 per cent as a measure of distribution, there are only 15 countries in the world, which have a better consumption / income distribution than india. while growth is considered to be a key measure of macroeconomic performance, economic stability is indicated by inflation. in the ‘ eighties, india ’ s average inflation rate was close to asian developing countries, above developed ones and lower than the average for all developing countries. in the ‘ nineties, inflation has been relatively low in the second half of the decade. in the external sector, india, along with china, has been described as

be of interest especially to our foreign delegates. nepal ’ s modern financial system has evolved through 80 years. up until 1983, the financial sector was highly controlled. in the mid - 1980s, the country embarked on a financial liberalization drive with a view to developing a diversified and competitive financial sector. a major structural change in financial sector policies, regulations and institutional developments was witnessed. the government emphasized the role of the private sector for the investment in the financial sector. subsequently, the door was opened for foreign banks to open joint venture banks in nepal. due to the adoption of financial liberalization policy, a proliferation in number of banks and financial institutions ( bfis ) was observed in nepal in the earlier decades. however, the growth has moderated as nrb imposed moratorium on licensing of bfis. for the last two years, banking system of nepal is experiencing an encouraging restructuring and consolidation, particularly through the merger and acquisition. nrb has taken consolidation in the financial sector as an important reform measure for building strong and competitive financial environment. as of mid - january 2017, the number of commercial banks stood at 28 while the number of development banks aggregated 57. similarly, there were 36 finance companies and 48 microfinance institutions. moreover, there were 15 cooperatives permitted by nrb to conduct limited banking activities as well as 25 financial ngos also licensed by nrb to undertake micro finance activities in nepal. ladies and gentlemen, nepal rastra bank and the government of nepal have been according due priority to values - based banking as demonstrated by their focus on microfinance which gained momentum in the 1990s as an instrumental tool for social mobilization and poverty reduction. consequently, some policy models were introduced including the grameen bank model, the wholesale micro finance model, the directed lending model, project - based micro credit model, and the fingos and the saccos model. i would now like to take your few minutes to highlight a couple of recent policy provisions which show that both the government and nrb have given a clear message to banks and financial institutions of the country to focus more on the well - being of the people, especially those residing in the rural areas, and not just on profit. first of all, acknowledging the significance of financial inclusion for nepal, the government through the budget for 2016 / 17 provided some policy directions. these included expansion of banking and financial services in the rural areas, promotion of mobile banking and branchless banking, continuation of government led programs such as rural self reliance fund ( rsrf