meetings and perhaps even hold on - the - spot conciliation meetings for complaint redressal. ultimately, responsible borrowing facilitated by financial literacy and responsible lending by financial institutions are essential for consumer protection and financial stability. summing - up 30. financial inclusion primarily represents access to a bank account backed by deposit insurance, access to affordable credit and the payments system. the indian experience demonstrates that financial inclusion can work within the framework of mainstream banking within a sound regulatory framework. regulations have been used to facilitate financial inclusion without subventions or compromising on prudential and financial integrity norms. regulations have been proportional to the risks. innovative solutions like shg bank linkage, branchless banking have been adopted after careful assessment of risks to the banks as also to customers. the preference has been to restrict deposit taking to banks and non - bank financial companies are encouraged to focus on innovative approaches to lending under a lighter regulatory framework, with additional regulations for systemically important nbfcs entities. non - banking non - financial players are encouraged to be partners and agents of banks rather than principal providers of financial services. fair and transparent code of conduct enforced through an effective grievance redressal system and facilitated by financial literacy and education are the cornerstones for ensuring consumer protection which is an overarching objective of financial regulation in the context of financial inclusion thank you.

india. as part of the celebrations, several outreach activities were undertaken at remote unbanked areas. during these visits, we were often asked by the people about “ fly by night ” operators who had vanished with their life savings. the distress to people and the damage to public confidence caused by such unscrupulous operators are something that no regulator can ignore. sound and reliable deposit taking entities, backed by deposit insurance for small deposits, accessible to all are, therefore, essential for financial inclusion. it is not possible to have sound and reliable deposit taking entities and a deposit insurance system without financial regulation. hence, in my mind, there is no doubt that financial regulation and financial inclusion work together – the former is a must for the latter. 6. another reason why there is convergence between financial regulation and financial inclusion is that if financial intermediaries have to deliver affordable services they need to take advantage of technology and economies of scale – this requires them to grow to some optimal size. such growth is not possible without capital. investors and lenders are comfortable with providing more funds only if such entities are regulated. this was our experience with micro finance institutions ( mfis ) wanting to be registered as non - banking financial companies with rbi, but wanted us to reduce the minimum capital requirement below what we had prescribed for non banking financial companies in general. we allowed them to register, on fulfilling the prescribed norms, without lowering the minimum capital requirement. the dramatic growth of mfis in the recent period on account of support by lenders and investors owes in no small measure to their being registered with rbi as non banking financial companies ( nbfcs ). 7. more recently, in the context of the global crisis, it is observed that undue reliance on borrowed funds can be a source of risk and a more stable retail base of deposits is good for both the bottom line and resilience. similarly, a diversified asset portfolio lends to less volatility in earnings. thus financial inclusion which can promote such a retail and diversified portfolio – in assets and liabilities – also promotes financial stability. regulatory interventions for facilitating financial inclusion 8. in this section, i would like to highlight the various regulatory measures taken by the rbi to facilitate financial inclusion. the key message here is that the regulatory approach has not compromised with prudential norms for deposit taking entities. we are of the firm view that only sound and strong institutions can deliver financial inclusion. within the overall traditional prudential framework, what we have