, can compete shoulder to shoulder with the global banks to get a decent space in the global value chains. 8. size is essential, but efficiency is even more important. efficiency, however, is a much broader concept and requires several other factors to evolve and act along its side. the prerequisite will be use of technology. the quality and ingenuity of technology should match our aspirations of acquiring scale and diversion of business across the globe. the focus of use of technology should shift from ‘ transactions - based ’ to ‘ business - oriented ’. we have a pocket full of technological tools like big - data, artificial intelligence, machine learning to leverage upon, in order to be able to compete with the global players in reaping the benefits of ‘ creativity ’ looming large all over. 9. while introspecting on newer ideas to improve the health of banks and quality of banking, it is fundamental to reform the culture of governance and risk management systems. these two areas lend inherent strength to the business of banking and good amount of work has been done in this direction over the years. the rbi has issued a discussion paper on g ‘ overnance in commercial banks ’, for comments from various stakeholders. ideally, efficiency should be ownership - neutral. while it is natural that the capital - providers or investors would like to remain alive to the aspects of how exactly a bank is run, it is worthwhile to allow sufficient leeway to the board and management of a bank to run the affairs of a bank in a professional and autonomous manner. a decent distance between the owner and the professionally sound management and board would promote robustness of banking institutions. 10. there will be newer risks with newer business models. more so, when banks get bigger and more connected across diverse jurisdictions. high growth by virtue of newer business models can be achieved with clear understanding of one ’ s own strengths and weakness. remaining overly risk - averse may seem to be a measure of self - immunisation ; but will be self - defeating as it would affect the bottom lines adversely. risk propensity should be in alignment with the individual bank ’ s measured risk - appetite. the risk management system should be sophisticated enough to smell vulnerabilities brewing within the various businesses well in advance and should be dynamic enough to capture looming risks in sync with the changes in external environment and best practices. 11. one visible area of concern in the arena of risk management is the inability to manage the operational risk / s

to normal functioning without relying on the regulatory relaxations and other measures as the new norm. 5. in my address today, i would like to dwell upon the following theme : it is time for banks to look deeply within : reorienting banking post - covid. just like boosting immunity of the population is the key to tackle pandemics, the key to long term financial stability would be to foster tangible improvement in the inherent ability of the banks to withstand the exogenous shocks like the current pandemic. as i have stated elsewhere, the causes of weak banks can usually be traced to one or more of the following conditions : an inappropriate business model given the business environment ; quality or the lack of governance and decision making ; misalignment of internal incentive structures with external shareholder / stakeholder interests1 and other factors. accordingly, the core of resilient banks is made up of good governance, effective risk management and robust internal controls. this is not to say that indian banks do not have sound governance and risk management systems in place. there is always scope for improvement and these are the areas which need greater attention going forward. 6. in recent years, the business landscape of banks has undergone significant change. today the banks need to look out for ‘ sunrise ’ sectors while supporting those which have the potential to bounce back. for instance, banks need to look at prospective business opportunities in the rural sector which remain unexplored despite efforts to support it. they need to look at start1 / 3 bis central bankers'speeches ups, renewables, logistics, value chains and other such potential areas. the banking sector has a responsible role to play not only as a facilitator of growth of the economy but also to earn its own bread. thus, a complete relook at the business strategy and orientation is the immediate need of the hour. 7. scale ignites the volume effect in business turnover ; but that presupposes bigger size of the banks. despite several reforms in the banking sector since its nationalisation, lot more needs to be done. with change in time, the nature of reforms needs to be reconfigured. the current steps towards consolidation of public sector banks in line with the narasimham committee recommendation is a step in the right direction. indian banks this way can reap the benefits of scale, and become partners in the newer business opportunities across the globe. larger and more efficient banks, both in public and private sector