the proposal for agricultural banks was first mooted as long back as in 1858. several committees had been recommending constitution of agricultural banks. in 1901 the famine commission recommended the establishment of rural agricultural banks through the establishment of mutual credit associations, and such steps as were taken by the government of north western provinces and oudh. the underlying idea of a number of persons combining together was the voluntary creation of a new and valuable security. a strong association competent to offer guarantees and advantages of lending to groups instead of individuals were major advantages. the commission also suggested the principles underlying agricultural banks and land banks. based on the recommendations of the edward law committee, the cooperative credit societies act was passed in 1904. as its name suggests, the cooperative credit societies act was restricted to credit cooperatives. it was only subsequently, a more comprehensive legislation called the cooperative societies act was enacted. this act, inter alia, provided for the creation of the post of registrar of cooperative societies and registration of cooperative societies for various purposes and their audit. 31. “ the underlying idea of all mutual credit associations, such as we recommend, is that a number of persons, by combining together, create a new and valuable security, which none of them previously possessed as individuals. co - operation substitutes for isolated and helpless agricultural units a strong association competent to offer guarantees and capable of inspiring confidence. the advantages of lending to groups instead of to individuals need no demonstration. it is simpler for a creditor to deal with a group of fifty or a hundred associated cultivators than with the same number singly ; it is simpler for him to obtain repayment from the group than from each of the members composing it ; it is simpler for the group to make its own arrangements with each member than for the lender to try to do so ”. 32. what i just now read is from the report of the famine commission 1901. doesn ’ t ring several bells? our modern day self help groups ( shg ), joint liability groups ( jlg ), micro finance institutions ( mfi ) were all in the thought process some full hundred years before. perhaps, they were the ideas well ahead of their times. cooperatives in the first half of 20th century 33. the first half of the 20th century saw phenomenal growth of cooperatives in general and the number of credit cooperatives in particular had reached more than two lakh. but what was their contribution? the all india rural credit survey, in their report in 1954, brought forth

##pers. this brings me to my third point — interest rates are increasing. the economy needs higher rates and can handle them. with demand starting to run ahead of the economy ’ s capacity, we need higher rates to bring the economy into balance and cool domestic inflation. we also need higher interest rates to keep canadians ’ expectations of inflation anchored on the target. we can ’ t control or even influence the prices of most internationally traded goods. but if canadians ’ expectations of inflation stay anchored on the 2 % target, inflation in canada will come back down when global inflationary pressures from higher oil prices and clogged supply chains abate. we are committed to using our policy interest rate to return inflation to target and will do so forcefully if needed. increases in the bank ’ s policy rate raise the interest rates on business loans, consumer loans and mortgage loans — and they increase the return on savings. we have been clear that canadians should expect a rising path for interest rates, but seeing their mortgage payments and other borrowing costs increase can be worrying. we will be assessing the impact of higher rates on the economy carefully. we recognize everyone wants to know where rates might end up — how high they will need to go. it is important to remember that we have an inflation target, not an interest rate target. this means we do not have a pre - set destination for the policy interest rate. but i can say that canadians should expect interest rates to continue to rise toward more normal settings. by more normal we mean within the range we consider for a neutral rate of interest that neither stimulates nor weighs on the economy. we estimate this rate to be between 2 % and 3 %. two weeks ago, we raised the policy rate to 1 %, still well below neutral. this is also below the pre - pandemic policy rate of 1. 75 %. how high rates go will depend on how the economy responds and how the outlook for inflation evolves. the economy has entered excess demand with considerable momentum and high inflation, and we are committed to getting inflation back to target. if demand responds quickly to higher rates and inflationary pressures moderate, it may be appropriate to pause our tightening once we get closer to the neutral rate and then take stock. on the other hand, we may need to 2 / 3 bis central bankers'speeches take rates modestly above neutral for a period to bring demand and supply back into balance and inflation back to target. finally, let me a say a word about our balance