apart from advertising in those social sites, about participating in such conversations to extract the best and improvise? although bankers in the west are increasingly starting to participate in the social media, they still mull over the security and other concerns such as accountability in participating in social media. but as it always happens in technology or any other dynamics, the bankers tend to tread with caution and this area is no exception. balancing business gain with added risk the most universal risk worry for banks large and small is the credit risk. regulators will want to see banks with least credit risk, yet keep credit standards high. credit risk will continue to be a big focus as long as depositors ’ interest is paramount. as a result, banks will need to obtain more and better data to make credit decisions and to create analytics based on that data. but the essence of analytics lies in the fact that the qualitative data is not fragmented for consolidation. the dashboard should effectively give drill down view of the underlying credit risk of the top layer of the credit portfolio. why not modernise the core? i am happy that no bank today advertises that “ we are 100 % computerised or 100 % branches under core banking solution ”. that marketing trend is behind us. but after a decade of cbs wave, the moot point is how many banks have upgraded to the next best level? have we migrated to the latest os, application technology, security devices et al? how many banks have migrated to the latest cbs platforms? perhaps, those who migrated had faced issues and therefore, other may be diffident. but upgrade is the only way to sustain the competitive edge and remain close to reality. core banking renewal also comes with the prospect of delivering on the promise of conducting business in real time. so being modern to the core has to be the focus for banks for the days to come. bis central bankers ’ speeches why not collaborate? the modern collaboration has rendered the ability to work together in real time. with the rise of new collaboration technologies – be they based on the web or in the cloud, and whether they are powered by videoconferencing, voice, wikis, software or hosted solutions – collaboration tools have reached a point where cost and familiarity are no longer a barrier to adoption but the content they deliver are making great impact. imagine the sms alert of a stolen card swipe and the resultant card block! in this context, i also wish to flag the issue of banks investing huge amounts in data

to be fair to the sector, some of the events were external & hence, not in control of the bank management. but the important lesson is unambiguous : “ in absence of strong structural and governance reforms, consistency of the performance would always remain susceptible to such events ” such reforms in private incentives / compensations sector banks have to be focussed on misaligned agenda for psbs is much larger, however, the immediate and overriding priority is to complete the clean - up of the banks ’ balance sheets which is underway resultant provisioning needs coupled with meeting basel iii norms / migration to ifrs & to capture due market share in growth funding would entail recapitalisation of most of these banks. seeking this capital externally at this stage may be difficult as also value eroding for the majority owner. simultaneously process has to continue to bestow greater “ governance autonomy ” to these banks. my sense is that the government ownership of these banks has resulted in crucial stability and resilience in trying times. immediate roadmap should, therefore, be towards complete “ managerial autonomy ”. if government remains the largest shareholder, not necessarily majority shareholder, it still serves the intended purpose. at the same time, it releases these banks from multi - institutional oversights and overlapping controls. bis central bankers ’ speeches hr autonomy would naturally flow from the above. banks would be able to move towards competitive compensation, flexible hiring and move away from the “ collective bargaining ” - just to quote a few from many possible outcomes. there could be a reasonable apprehension that such measures can adversely impact the objectives of inclusive growth being attempted through several national missions and schemes. i would argue that advent of several new institutions ( as recently licensed by rbi ), new processes, digital advancements & competition would ensure that these objectives are well supported. similarly, some of the reforms are driven by a global reform structure. these pertain to capital, liquidity and disclosure standards under the basel iii package. some such other measures are tlac, sibs, misconduct rules, etc. few other measures are currently under discussion, such as, imposing risk weight on sovereign exposure and new standardised approach for credit and operational risk. having dealt with the framework of macro reforms, let me now briefly touch upon nuts and bolts of the reform process. governance in banks • some action already taken - setting up of bbb, post of cmd split into a non - executive chairman and a ceo, selection process made more objective