self - reliant ” in using the channels. though, the banks may have strategies for increasing the usages of alternate channels, successful adoption would depend to a large extent on the line managers dealing with customers. are they motivated enough to promote alternate channels? how do we incentivize the branches that initiate the customers to electronic banking? 22. question 5 : outsourcing or abdicating – are banks treading the thin line? it is but natural for banks to outsource their some of their activities especially their it related activities. however outsourcing brings in its wake, several risks and thus it is imperative for any bank outsourcing its activities to ensure effective management of these risks. do the banks have adequate controls over the outsourced activities and outsourcing entities? i heard of an incident where the administrative password of a critical application server of a bank was with the vendor not with the system administrator of the bank. delegating is what we ask someone to do on our behalf ; while abdicating is what we do as escapism, camouflaging lack of skill sets. 23. one related question is over - dependence on certain it systems ( including operating systems and databases ) resulting in concentration of risk in certain components / vendors which are spread across the banking sector. what could be done to redress this? bis central bankers ’ speeches 24. question 6 : are banks properly leveraging technology for inclusive banking? the challenge in financial inclusion is reducing the gap between demand and supply of financial services. delivery of banking services is not always feasible in rural areas with cost effective distribution being a challenge. can the technology help in meeting this distribution gap? everybody is pinning hope of mobile technology for financial inclusion. is it an exciting possibility or a meaningless dream? it is definitely an exciting possibility. the mobile banking in india is gradually making in - roads. however, the success of mobile banking would depend on how the banks and the mobile service providers co - operate and collaborate to deliver the financial services to the unbanked. further, it would depend on banks how they can leverage the technology to improve business, whether it ’ s through mobility, low - cost atm rollouts, or revenue sharing models and service management. 25. question 7 : time for wake up call for banks? the world payments report 20126 puts india as the 13th largest non - cash payments market in the world, with non - cash volumes have been growing about 10 % a year

##af3812d1985b911e0d29a0da8a5043. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice chart 4 how the alf will work19 we ’ ve come a long way since eddie george ’ s speech almost 20 years ago. but one thing that remains more important to us than ever is working with you. the liquidity facility i ’ ve described here today is in no small part a product of close and committed co - operation between the bank, industry bodies and the private sector. it ’ s a real step forward, but it ’ s only one step. through continued engagement and focused effort, together we can build a more innovative, diverse and inclusive marketplace : one which really can meet the needs of every part of our society. thank you in the first instance, ( 1 ) the bank prefunds the alf with an interest - free loan, which is used ( 2 ) to purchase eligible sukuk and ( 3 ) any hedges required to insulate the fund from fx risk. islamic banks then ( 4 ) place deposits in the alf, the principal value of which is guaranteed by the bank to ensure the facility is hqla - compliant. in the event the aggregate value of participating bank deposits do not reach the aggregate value of the fund, the bank will step in as co - depositor for the residual amount. the rate of return on the deposit ( 6 ) is based on the rate of return on the portfolio backing it, net of hedging and other operational costs ; and on maturity the return from the fund is paid over to participating banks, and the principal amount is returned or rolled over. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice