and convenience. all these issues are receiving due attention for prioritized resolution. rbi has also established national payment corporation of india for focused attention on development and implementation of requisite technologies for enabling new modes of delivery. electronic payment systems one of the areas where technology has facilitated significant revolution is payment systems. it started with the mechanization / automation of certain processes by introduction of cheque sorters and readers, micr based clearing etc. and has moved on to use information technology for efficient funds transfer mechanisms such as ecs, neft, cts, rtgs. the focus has shifted from the initial needs of capacity management for handling increasing volumes, to efficiency enhancement in transaction processing for the benefit of businesses, markets as well as retail customers. we are witnessing increasing utilization of these delivery mechanisms and have to think about the next higher level of technology and sophistication to bis central bankers ’ speeches meet the rising expectations of the market participants. rbi has already initiated work towards introduction of new generation rtgs, which will be able to handle rising volumes, provide better functionalities and has better technological adaptability. our journey towards leveraging technology for making our payment systems at par with the best in the world will continue with appropriate contributions from all concerned. another important benefit derived from information technology deployment is the ability of banks to provide innovative delivery channels. online banking, debit & credit card payments, atm access to other bank customers, point of sales terminals etc. have all changed the way bank customers are able to transact for their day to day needs, thereby creating a huge eco system of convenient banking facilities which substantially reduces the need for physical proximity and handling of cash. it also provides access to a large number of global retail markets to our citizens. use of it for improving internal effectiveness – significance and benefits focus of technology in indian banking, so far, has, mainly, been on transaction processing, data storage, service delivery, and rightly so. these were our priorities to make banking better, convenient and more accessible. now, that our banking has reached a stage where many of such services are running on tech enabled processes, we can look forward to improving other areas which were not, hitherto, focus of our attention and have huge scope for improvement, such as internal management and back end processes. currently, while data storage and retrieval are on computerized systems, the administrative processes are largely manual, warranting huge resource deployment. this adds to costs, impacts efficiency and reduces effectiveness of

of monetary policy in overcoming inflation. that has reduced not just expected inflation, but also the inflation risk premium – the cost levied by lenders to protect them against uncertain price changes. but the decline in nominal yields has also been driven by a fall in real yields, which is the real return generated by the balance of saving and investment in the economy. a temporary period of policy rates being close to zero or even negative in real terms is not unprecedented by any means. over the past decades, however, we have seen long - term yields trending down in real terms as well, independent of the cyclical stance of monetary policy. the drivers behind this have been, among others, rising net savings as ageing populations plan for retirement, relatively less public capital expenditure in a context of high public indebtedness, and a slowdown in productivity growth reducing the profitability of investment. bis central bankers ’ speeches one study finds such factors can account for around 400 basis points of the 450 basis points fall in long - term real interest rates over the past 30 years. 1 the forces at play are fairly intuitive : if there is an excess of saving, then savers are competing with each other to find somebody willing to borrow their funds. that will drive interest rates lower. at the same time, if the economic return on investment has fallen, for instance due to lower productivity growth, then entrepreneurs will only be willing to borrow at commensurately lower rates. on both counts, it is structural factors that have lowered the real return on investment. and since we operate in a global capital market, this has exerted downward pressure on returns on savings everywhere. the role of asian economies in this story has been well - documented, for instance in the “ global savings glut ” thesis. 2 but today the euro area is also a protagonist. we have a current account surplus over 3 % of gdp, and our largest economy, germany, has had a surplus above 5 % of gdp for almost a decade. in the past, countries with such surplus positions may have been able to easily export excess savings towards countries willing to borrow them at higher rates. this would have prevented domestic interest rates from falling, as would otherwise have been the case. and that would have been good for the global economy as saving flowed from ageing, slower growth economies to those with younger demographics and higher investment needs. but in a world where real returns are low everywhere, there is simply not enough demand for capital elsewhere in