in october 2013, the bank hosted the fourth meeting of the financial stability board regional consultative group for sub - saharan africa, which i co - chair. in january 2014, the bank hosted a meeting of the committee of african banking supervisors of the aacb, which is chaired by a senior colleague from the directorate of supervision. in may 2014, the bank hosted the ifsb summit. our work with sadc and comesa continued apace, making further progress in the area of macroeconomic convergence, financial stability, and development of the regional payments system. we also welcomed a delegation of the african union ’ s high level panel on illicit financial flows from africa, headed by his excellency thabo mbeki, former president of south africa. the visit offered an opportunity to share our experience on such matters as our due diligence process and the application of international best practices and standards in the field. the banking sector of the future i intend to spend the rest of my third mandate to prepare the transition of our banking sector to meet the needs of the high - income economy that is within our sights. we recognise that a lot still remains to be done, especially if we want to hasten progress in this direction – which is a perfectly legitimate objective in view of our past trajectory. we have continuously strengthened our regulatory and supervisory framework to reinforce the resilience of our bis central bankers ’ speeches banking sector. we have stepped up our efforts to modernise our payments system infrastructure, and floated international tenders for the national payment switch. this will revolutionise the payment space, reduce transaction costs, and level the playing field for smaller banks and other potential payment processors who cannot currently compete away the high margins prevalent in the industry because of the prohibitive cost of installing alternative platforms for the provision of new technology - driven products. we have amended legislation to allow differentiated banking licences in such areas as islamic banking, private banking and investment banking. we have set out a framework to provide for agent banking for more efficient delivery of banking services and to promote financial inclusion. in parallel, the bank has been vested with new powers, giving us explicit responsibility for promoting public understanding and awareness of financial products, and for conducting investigations. credit unions with assets of more than rs20 million have also come under our purview. we recognise the pioneering role that credit unions have played in improving financial access to previously unbanked segments of society and we shall apply proportionality in our approach to supervising and regulating the sector. we have

launched the extensible business reporting language ( xbrl ) project that will simplify data collection and reporting by banks and other regulated institutions while also facilitating in - depth and timely analysis at the bank. we have continued with process re - engineering and organisational restructuring to deliver on our extended mandate, to meet new challenges, and to incorporate new technology. in addition to the intelligence, compliance, and enforcement section mentioned earlier, we also set up a specialised unit for reserve management to serve as the nucleus for a middle office and risk management division which we created just after the period covered by this report. we re - jigged the economic research division and tasked it with developing our forecasting and modeling capacity to support our expected move to an explicit inflation targetingregime. none of these moves would have been possible without recruiting new staff, with the requisite experience, at an appropriate level in the bank ’ s hierarchy. already a technologyintensive industry, banking will become a battlefield for still more disruptive technologies in future. an ageing staff, with dated skills and outmoded work habits, will be hard - pressed to cope with the emerging challenges facing the regulator. we placed considerable emphasis on upgrading our in - house skills and recruiting new blood. we opened our doors to regular graduate interns two years ago. we followed it up this year by launching a graduate trainee programme which will allow the bank to spot potential new recruits, enhance its professional competence, and rejuvenate its workforce. the rupee goes polymer last august, the honourable prime minister launched our very first polymer bank notes, which have been in circulation since then. i am happy to say that two of the three polymer bank notes have received international recognition. the rs25 polymer bank note and the rs500 polymer bank note were shortlisted for their state - of - the - art security features at the international association of currency affairs 2014 technical excellence in currency awards. our rs25 bank note came out 2nd in this contest. i am pleased to say that our efforts to adhere to the highest standards in all business areas have paid dividends. words of appreciation i have always been guided by my sens du devoir in discharging the immense responsibility entrusted to me by the prime minister to lead the central bank of the country in the midst of challenging times for our economy and our people. it has not been an easy ride. my task would have been still more difficult, had i not received the support of the staff of the