when eventually a group was victorious over the others, it bis central bankers ’ speeches was natural for it to impose centralized autocratic rule to ensure that chaos did not remerge. to rule over the large geographic area of the country, china needed a well - developed elite bureaucracy – hence the mandarins, chosen by exam based on their learning. so china had strong unconstrained effective government whenever it was united, and fukuyama argues, unlike western europe or india, did not have strong alternative sources of power founded in religion or culture to impose rule of law. in western europe, by contrast, the christian church imposed constraints on what the ruler could do. so military competition, coupled with constraints on the ruler imposed by canon law, led to the emergence of both strong government and rule of law. in india, he argues, the caste system led to division of labour, which ensured that entire populations could never be devoted totally to the war effort. so through much of history, war was never as harsh, or military competition between states as fierce, as in china. as a result, the historical pressure for indian states to develop strong governments that intruded into every facet of society was muted. at the same time, however, the codes of just behaviour for rulers emanating from ancient indian scriptures served to constrain any arbitrary exercise of power by indian rulers. india, therefore, had weaker government, constrained further by rule of law. and, according to fukuyama, these differing histories explain why government in china today is seen as effective but unrestrained, while government capacity in india is seen as weak, but indian governments are rarely autocratic. any of these grand generalizations can, and should, be debated. fukuyama does not claim history is destiny, but does suggest a very strong influence. of course, the long influence of history and culture is less perceptible when it comes to democracy where some countries like india have taken to it like a duck to water. a vibrant accountable democracy does not only imply that people cast their vote freely every five years. it requires the full mix of a raucous investigative press, public debate uninhibited by political correctness, many political parties representing varied constituencies, and a variety of non - governmental organizations organizing and representing interests. it will continue to be a source of academic debate why a country like india has taken to democracy, while some of its neighbours with similar historical and cultural pasts have

banking supervision have underscored consolidated supervision as an independent principle, the reserve bank had introduced, as an initial step, consolidated accounting and other quantitative methods to facilitate consolidated supervision. the components of consolidated supervision include, consolidated financial statements intended for public disclosure, consolidated prudential reports intended for supervisory assessment of risks and application of certain prudential regulations on group basis. in due course, consolidated supervision as introduced above would evolve to cover banks in mixed conglomerates, where the parent may be non - financial entities or parents may be financial entities coming under the jurisdiction of other regulators. application of advanced technology the role of technology in banking in creating new business models and processes, in maintaining competitive advantage, in enhancing quality of risk management systems in banks, and in revolutionising distribution channels, cannot be overemphasised. recognising the benefits of modernising their technology infrastructure, banks are taking the right initiatives. while doing so, banks have four options to choose from : they can build a new system themselves, or buy best of the modules, or buy a comprehensive solution, or outsource. a further challenge which banks face in this regard is to ensure that they derive maximum advantage from their investments in technology and avoid wasteful expenditure which might arise on account of uncoordinated and piecemeal adoption of technology ; adoption of inappropriate / inconsistent technology and adoption of obsolete technology. a case in point is the implementation of core banking solution by some banks without assessing its scalability or adaptability to meet basel ii requirements. financial inclusion while banks are focusing on the methodologies of meeting the increasing demands placed on them, there are legitimate concerns with regard to the banking practices that tend to exclude rather than attract vast sections of population, in particular pensioners, self - employed and those employed in unorganised sector. while commercial considerations are no doubt important, banks have been bestowed with several privileges, especially of seeking public deposits on a highly leveraged basis, and consequently they should be obliged to provide banking services to all segments of the population, on equitable basis. further, experience has shown that consumers ’ interests are at times not accorded full protection and their grievances are not properly attended to. feedback received reveals recent trends of levying unreasonably high service / user charges and enhancement of user charges without proper and prior intimation. it is in this context that the governor, reserve bank of india had mentioned in the annual policy statement 2005 - 06 that rbi will take initiatives