meet their targets. there is also readjustment in some sub - targets, whereby the banks are now required to progressively achieve 8 % of lending to small and marginal farmers and 7. 5 % to the micro enterprises among the mses in a phased manner. this has been brought about with an underlying objective of making available finance to the most needy and the most alienated of the borrowers. this may probably pose a bit of a challenge initially but i believe with proper planning, these targets could be achieved sooner rather than later. vii ) pmjdy and beyond i must compliment the banking sector for wholeheartedly working for the success of the pmjdy scheme. the numbers speak for themselves. more than 14. 5 crore accounts opened. that leads to the question - what next? flow of individual savings, albeit howsoever small combined with flows from direct benefit transfer would be crucial to give an initial push bis central bankers ’ speeches to keep these accounts active while extending productive / need - based credit would be the second crucial step. the onus is upon all of us to ensure that the window of opportunity that has been presented by the opening of such a large number of accounts, is not put to waste by allowing the accounts to turn inactive. the credit absorption capacity of the farmers can be enhanced through consolidation of fragmented landholdings by ushering in land reforms or through pooling of land holdings in a shg format. similarly, customers may also be trained to undertake non - farm activities. efforts to enhance the credit absorption capacity must also be supplemented through financial literacy and vocational training initiatives. improved financial literacy would aid the inculcation of a savings culture and investment habit amongst the customers, which can be leveraged by the banks by offering suitable small savings, investment and pension products. a major challenge for the banks would be to manage their banking correspondent model effectively. the problems relating to their viability, governance, cash management, linkage and oversight from a base branch need to be quickly addressed. the entire financial inclusion ecosystem must progressively develop, if the momentum gathered under the pmjdy exercise has to be sustained for all - round benefit of all stakeholders. viii ) globalization of regulation - making process as i alluded to a little earlier, banking regulations are getting increasingly globalized, subject of course to certain national discretions. as members of the standard setting bodies like bcbs and fsb, we are committed to implement these regulations in our jurisdictions. there is a process for peer review

have to adjust their staffing levels in order to maintain their business margins. hence the importance of creating an environment conducive to technological innovation and to higher productivity, which i shall refer to later. the second area where risks have arisen from the extended expansionary phase of the economy is related, as earlier indicated, to the ongoing buoyancy of household spending on consumption and residential investment. this variable has been favoured by the notable generosity of financing conditions, and this has given rise to certain pressures on the financial position of spanish households. as is known, household debt last year held on the upward course it has been following since the mid - nineties, clearly exceeding 100 % of the sector ’ s gross disposable income. this new peak marks a departure from the average levels of the euro area and is beginning to draw closer to that of countries such as the united states. although the low interest rates and the long average maturities of liabilities keep the financial burden within moderate limits, at end - 2004 the cushion of saving available after interest and capital payments had fallen to practically zero for spanish households as a whole. however, the effects of higher indebtedness and of this lower saving on household wealth were again more than offset by the notable surge in their real - estate wealth, which was strongly linked to the rise in house prices. as a result, the overall financial position of spanish households remains sound. the strength of the sector ’ s balance sheet as a whole is likewise reflected in the microeconomic information drawn from the spanish survey of household finances recently compiled by the banco de espana. although this survey identifies a household segment that is in a more vulnerable situation than is apparent from the overall indicators, the size of this segment is small. while the notable changes in the household balance sheet have not led to a weakening of their wealth position, there has been an increase ( by various mechanisms ) in this sector ’ s exposure to a relatively broad range of possible shocks, thereby raising the sensitivity of consumption and of residential investment to them. these shocks notably include those that may affect employment, a variable which, as mentioned above, largely determines the behaviour of household spending. obviously, the behaviour of interest rates is also very important. however, the greatest uncertainties lie in the possible implications of developments in the real - estate market. this market is in the midst of an expansionary phase which still shows no clear signs of faltering, despite its extraordinary duration and intensity. 2004 ended with