against 42. 8 for all - india. this also indicates that more extension and expansion of the country as a whole, and even in this region. what more for the region – a balancing act? 19. let us now discuss what more the banking system can do for the region. there are several expectations by the region out of the banking system and there are several compulsions on the banking system. further, there are certain peculiar specialities in this region. a standard response by the banking system will be to skip these. in my opinion, the banking system should, instead, find a fine balance between managing these peculiarities and adhering to set best practices. • first of course, is that the region expects continued support from the banks for its growth lead to be maintained. that is, the region expects to maintain the more than 100 % cdr. while the banking system will be willing to be partnering this, it will have to do so by balancing the expectations from the rest of india. every region competes bis central bankers ’ speeches for greater flow of credit and financial services and the banking system has the responsibility in addressing this. • second, this region is susceptible to vagaries of nature and natural calamities strike this region in a severe way, affecting especially the agricultural sector. maintaining steady flow of credit to the agricultural sector is a challenge. complicating this is the ineffectiveness of agricultural insurance. this region has the peculiar, but popular, habit of gold loans smothering the agricultural loans. in that process, the farmers do not get the benefits of agricultural insurance. the banking system has to find a solution for this vexed problem of balancing their need to secure their interests vis a vis the protection for the farmers. i will return to discuss another variant of this gold loan related problems in a minute. • third, like any other region, this region also wants increased flow of credit for the micro, small and medium enterprises ( msme ) sector. as is well known, despite continuous increase in the bank credit for the msme sector, the formal credit flow for this sector is very meager compared to the enormous number of units in this sector and the banking sector should tap the great potentials of this sector. the biggest hurdles facing the banking system are its requirements of documentation, its traditional models of assessing the credit needs of the msmes and many a time, the gap in the attitude and sensitivity of the bank officials. it is heartening to note that the

non - banking financial companies ( nbfcs ) in this region have found a balanced answer to skirt around these hurdles and their flow to this sector has recorded good growth in recent times. perhaps, the banking sector can also find such a balance. • fourth, another speciality of this region is the preponderance of non - formal and informal, but riskier avenues for savings. this region is replete with history of the socalled blade companies, varieties of formal and informal chit funds, ponzi schemes, emu farms and other types of attractive schemes. these schemes have time and again captured the imagination of gullible, and even not - so - gullible people of this region, very often lured them into losing their hard earned savings. these ever running episodes only clearly establish the failure of the formal financial system, including the banking system, in catering to the savings, investment and risk taking needs and appetite of these masses. they very pithily indicate that there are savings to be mobilised in an orderly manner ; and there are people whose risk appetite is more than ordinary or normal and the formal financial system can offer them well regulated risky financial products. the banking system should come out with innovative and customized savings and financial products. this way they can balance their business opportunities with the niche needs of these people in the region. • fifth, another speciality of this region is very note worthy and heartening. that relates to the number of self help groups ( shgs ), especially of the women which operate in this region. in fact, the southern region leads by leaps and bounds in this respect. the readiness, the enthusiasm and the dedication and discipline of these women shgs are the backbones of their success. in the wake of their successes, certain unhealthy practices and certain overreactions to them had resulted in a slowdown, even in stoppage of credit flow to this segment. further, quite many shgs, before they have matured enough to handle credit and finance, have been exposed to credit. concomitantly, the credit discipline that had been assiduously built painstakingly over the years has been ruptured. restoring that spirit, while ensuring continued flow of credit is another balance the banking system has to find. conclusion 20. now, to conclude, we have seen how the regional economy did a turnaround in the post reform and financial inclusion period as compared to the pre - reform period ; the regional