boards and top management must set the “ tone at the top ” by creating an organizational culture that places high priority on risk management, compliance with policies and regulations, and high standards of ethical behavior at every level. this is done through ensuring that comprehensive policies, procedures, limits and controls are in place for all activities and ensuring that expectations for compliance are fully communicated throughout the organization. secondly, financial institutions ’ it systems and operational risk management processes must be up to date to reduce the risk of fraud due to system breakdowns, hackers, and processing errors. as you all are probably aware, customer information theft is rapidly increasing around the world. technology is one area where perpetrators can often get ahead of under - prepared institutions, gaining access to databases and mainframe systems, and accessing sensitive information including confidential customer data. key preventive measures include ensuring that it systems and software are updated frequently to defend against hacking attempts, viruses, and other breaches. robust system controls that carefully grant and monitor system access are equally important. sound operational risk management goes beyond technological controls. financial institutions should have well defined policies, procedures, and limits related to all transaction processing. in particular, those units responsible for executing cash or other transactions on behalf of their companies must ensure that controls include a segregation of duties that allows for an appropriate check and balance process. the lack of segregation of duties is usually a driving factor in fraud from trading activities. in both the barings episode in the 1990 ’ s and the most recent losses at societe generale, fraudulent transactions occurred as the traders found a way to control the execution and reconciliation of their trades. that leads to the third and final critical element of fraud avoidance : sound risk management and internal controls. financial institutions must be able to effectively identify and assess risk across their entire organization and ensure that process are in place to ensure compliance with internal policies and limits, laws, and regulations. in addition to the systems controls and the segregation of duties i have already mentioned, financial institutions need to have effective physical control of assets, clearly defined authorization limits and exception processes, and comprehensive risk management reporting to management and the board of directors. after management and the board of directors, the institutions ’ internal audit and compliance units should be the first line of defense in preventing and identifying fraud. those are the key responsibilities for institutions in the fight against fraud ; however, one of the bank of thailand ’ s key mandates is to ensure the safety and soundness of the financial system. an essential part of

s education is observed to be more important than household income for her child ’ s survival ( hdr, 2013 ). 34. the combined expenditure of central and state governments on education is just about 3. 3 per cent of gdp, while that on health is another 1. 3 per cent of gdp. in contrast, the european union countries spend from their general government account, 5. 5 per cent of gdp on education and 7. 5 per cent of gdp on health. canada ’ s public spending on health alone is over 11 per cent of its gdp and that on education is nearly 5 per cent. india needs to step up its public spending on education and health considerably over the next five years. even in the united states, average income of 20 per cent at the top of the distribution is almost 8 times higher than that of bottom 20 per cent. bis central bankers ’ speeches in addition to higher spending, quality of such spending is important. right skilling of our work force by adequate focus on technical education is the need of the hour. our technical institutes should get connected to the industry and the market and take inputs from there. 35. in the face of various constraints, the expenditure by the central and state governments on education alone will not be sufficient to make a difference. the private sector would also need to pitch in for improving the quality of education and educational system in the country. the banks have a very crucial role in facilitating pursuit of education by the resource - constrained youth. as we are all aware, the cost of education, in particular that of higher education, has risen very substantially. this is likely to result in exclusion of poor, but meritorious and deserving youth from obtaining quality education unless suitable funding is made available to them. in the year 2001, indian bank association ( iba ) prepared a model educational loan scheme ( since revised ) which forms the basis for banks ’ loans to students for pursuing various educational courses. rbi, on its part, has permitted banks to classify loans and advances granted to individuals for educational purposes, including vocational courses up to 10 lakh for studies in india and 20 lakh for studies abroad, under “ priority sector ”. further, the loans granted to educational institutions are eligible to be classified as “ priority sector ” advances under micro and small ( service ) enterprises, provided they satisfy the provisions of msmed act, 2006. the banks have been mandated not to obtain collateral security in the case of educational loans up to 4 lakh. 36. the statistics