it has been observed that in some arcs, there were long vacancies in the post of chairperson along with instances of chair of the audit committee ( acb ) also chairing the board meetings as well as a non - independent director chairing the board meetings, contrary to the extant framework. these things only go to show that the governance has not been receiving the required attention. diverse expertise coupled with independence is necessary for a competent board. a board equipped with independent directors with varied backgrounds, skills and experience allows for richer discussions leading to informed decision making. while non - independent directors may take care of certain interests, independent directors 2 / 4 bis - central bankers'speeches bring an unbiased perspective and play a key role in safeguarding from conflicts of interest. however, we have come across instances where there were not enough independent directors on the board or a sufficient number of independent directors did not attend board meetings. clarity of roles and responsibilities between the board and management is essential in ensuring the smooth functioning of the organisation and avoiding dysfunction. while the board is intended to give a strategic perspective and exercise broad oversight over the management, the executive management is responsible for running the day - to - day operations. the md & ceo is expected to function under the overall supervision, direction and guidance of the board and at the same time, maintain independence in performance of his or her duties. it is also important that the sub - committees such as the audit committee, nomination and remuneration committee, etc. are duly constituted and function in accordance with the statutory and regulatory requirements. prior preparation and diligence by board members is a sine qua non for effective governance and decision making by the board. i would urge board members to insist on receiving the agenda papers well in advance and thoroughly reviewing them. rather than merely going through summaries or presentations made by the management, i would request directors to meticulously review rbi supervisory letters and inspection reports, external audit reports as well as the reports provided by the internal assurance functions as they would provide valuable insights into the management's performance. business model of arcs the arc framework was intended to allow loan originators to focus on their core function of lending by removing the sticky stressed assets from their books. it also envisioned the revival of businesses through resolution of viable and productive assets. a review of the data indicates that one - time settlements and rescheduling of debt are the predominant measures of reconstruction employed by arcs. arguably, these measures could have been taken

of all the lands to be blown about my house as freely as possible. but i refuse to be blown off my feet by any ”. [ unquote ] the mahatma ’ s exhortation is even more true today than when he said it. 19. we need to learn from the best in the world, but adapt our learning to the demands and culture of a maturing and emerging economy. we need to be constantly pushing the envelope, be at the frontiers of domain knowledge, oftentimes reinvent it, but all the time remain sensitive to the core concerns of an emerging market economy, one which is still home to hundreds of millions of poor people. 20. that takes me to the third big challenge for the reserve bank – to widen and deepen financial inclusion. we all know from personal experience that economic opportunity is strongly inter - twined with financial access. such access is especially powerful for the poor as it provides them opportunities to build savings, make investments, avail credit, and above all, insure themselves against income shocks. at the aggregate level, financial inclusion provides an avenue for bringing the huge savings of the poor into the formal financial intermediation system, and for channelling them into much needed investment. one of the big take - aways from our outreach programme is that financial inclusion is not just a public good ; it is also a merit good. it empowers poor people in diverse ways. if there is to be “ inclusive growth ”, financial inclusion is the next big idea, as it will at once promote both growth and equity. 21. the final challenge for the reserve bank is to become a more transparent and sensitive institution. we are a public institution, and have an obligation to deliver quality service at the cutting edge level. we need to listen to people, be sensitive to their concerns, and redress their grievances. we also need to communicate effectively, and credibly and explain the logic of our decisions and actions at both technical and non - technical levels. being able to communicate clearly is non - trivial in many ways. “ centralbankspeak ”, the language that central bankers speak, can get counterproductive, if not used wisely. we all know of alan greenspan, the iconic chairman of the fed. he had to propose to his future wife seven times before she finally understood that he was actually proposing to her! the idea of india 22. a final thought before i close. a powerful lesson from the