order to ensure operational efficiency and close monitoring of bc operations, banks have been advised to open intermediate brick and mortar structures to provide support to about 8 – 10 bc units at a reasonable distance of 3 – 4 kilometers. an integrated approach has been adopted for achieving fi through financial literacy. various measures have been taken for the spread of financial literacy. a national strategy for financial education has been finalized. curriculum setting bodies are being involved for disseminating financial literacy in schools. what should happen? 30. the way forward for banks on the path towards greater productivity and efficiency has to be two pronged. on the one hand, banks need to focus on further improvement in operational efficiency so that they are at par with their global peers. concomitantly, banks also need to concentrate on improving allocational efficiency so that the benefits of improved operational efficiency are enjoyed by all. the key challenge will be to ensure that the two goals are synergized and allotted equal priority. 31. there are several other measures that indian banks need to initiate in order to establish the balance between allocational efficiency and operational efficiency : banks need to initiate internal reforms in order to ensure that their systems and processes are in a position to leverage technology to maximize productivity and efficiency gains. for this purpose, banks need to look at large scale business process and structure reengineering. transaction costs need to be reduced by fully leveraging technology. this would include creation of new cost effective products, business models and delivery channels. banks need to implement robust information systems and it architecture and should harness the power of the it systems for business development. besides, a strong it system will also aid in adoption of better risk management practices. bis central bankers ’ speeches productivity improvement should benefit people at the bottom of the pyramid through improved access to financial services and lower cost of financial access. every individual should have the opportunity to improve his / her financial position by leveraging access to the financial system. banks have to facilitate this. banks have to reverse the tendency of focusing on wholesale business and should ensure that agriculture, retail and sme business receive adequate attention. this is important not just for improving financial access for the smaller and marginalized groups, but also as a source of stability for banks. banks should strive to improve their pricing ability, both for liability and asset products, with the objective of ensuring that the pricing framework is transparent, non - discriminatory and non - exploitative. the basic principle of pricing should be that the poor and the vulnerable

bank to fully transform into a bank of things. of course, as i had mentioned earlier, this increases cyber risk manifold as attackers can spread viruses and malware from myriad remote devices, thus turning iot to what as someone has described as “ gateway to hackers ’ paradise ”. as marc goodman has very aptly put it : when everything is connected everyone is vulnerable 2. 24. at the end, i would like to draw your attention to the major challenge that awaits banks in the near future. three years ago brett king authored a book that focussed on how banking is going to be undertaken without involving the banks 3. the message was that to make banking relevant in the fast changing technology and ict based payment ecosystem, banks have to realise that technology is a great enabler and its powers need to be harnessed in every sphere of modern day banking without losing focus on safety and security. as i had mentioned earlier, in near future banks will, whether through conviction or compulsion, have to transform into technology companies. while leveraging the ubiquitous power of technology the focus has to be on what i can call five p ’ s. they are products ( in terms of offerings ), processes ( that ensure efficiency of operations ), people ( both customers and staff that take to technology engagement with maximum ease without losing sight of security needs ), productivity ( by enhancing margins ) and prudence ( by building more robust risk management system and regulatory compliance culture ). for this, appropriate it governance and it strategy driven by boards of the banks is of paramount importance. i am sure, directors are fully geared to accept the challenges of harnessing the power of it for their banks and this one and half day ’ s seminar has been a great catalyst in this pursuit. thank you very much for patient listening! marc goodman, 2015, future crimes : a journey to the dark side of technology – and how to survive it, doubleday. brett king, 2012, banks 3. 0 - why banking is no longer somewhere you go, but something you do, wiley. bis central bankers ’ speeches