ahead. what has been the impact? these reform measures have had major impact on the overall efficiency and stability of the banking system in india. the present capital adequacy of indian banks is comparable to those at international level. there has been a marked improvement in the asset quality with the percentage of gross nonperforming assets ( npas ) to gross advances for the banking system reduced from 14. 4 per cent in 1998 to 7. 2 per cent in 2004. the reform measures have also resulted in an improvement in the profitability of banks. the return on assets ( roa ) of the banks rose from 0. 4 per cent in the year 1991 - 92 to 1. 2 per cent in 2003 - 04. considering that, globally, the roa has been in the range 0. 9 to 1. 5 per cent for 2004, indian banks are well placed. the banking sector reforms also emphasized the need to review the manpower resources and rationalize the requirements by drawing a realistic plan so as to reduce the operating cost and improve the profitability. during the last five years, the business per employee for public sector banks more than doubled to around rs. 25 million in 2004. continuity, change and context we lay considerable emphasis on appropriate mix between the elements of continuity and change in the process of reform, but the dynamic elements in the mix are determined by the context. while there is usually a consensus on the broad direction, relative emphasis on various elements of the process of reform keeps changing, depending on the evolving circumstances. perhaps it will be useful to illustrate this approach to contextualising the mix of continuity and change. the mid - term review in november 2003, reviewed the progress of implementation of various developmental as well as regulatory measures in the banking sector but emphasised facilitating the ease of transactions by the common person and strengthening the credit delivery systems, as a response to the pressing needs of the society and economy. the annual policy statement of may 2004 carried forward this focus but flagged major areas requiring urgent attention especially in the areas of ownership, governance, conflicts of interest and customer - protection. some extracts of the policy statement may be in order : " first, it is necessary to articulate in a comprehensive and transparent manner the policy in regard to ownership and governance of both public and private sector banks keeping in view the special nature of banks. this will also facilitate the ongoing shift from external regulation to internal systems of controls and risk assessments. second, from a systemic point of view, inter

hegemony of the dominant reserve currencies. there is a need for greater understanding on both sides. in the meantime, so far as the reserve bank of india is concerned, we will continue to play by the extant rules of the game. 9. central banks have to interact closely with financial markets for transmission of monetary policy impulses. in this context, ensuring a sound and efficient payment and settlement system is 2 / 3 bis central bankers'speeches a pre - requisite. taking cognisance of exponential growth of digitisation and online commerce in india, policy efforts have been directed in recent years to put in place a state of the art national payments infrastructure and technology platform. this has changed the retail payments scenario of the country. regulation and development of our payment system envisages the objectives of safety, security, convenience, accessibility, and leveraging technological solutions to enable faster processing. in order to ensure an orderly development of fintechs and streamline their influence into the financial system, we are now working on guidelines to introduce a ‘ regulatory sandbox / innovation hub ’ within a well - defined space and duration to experiment with fintech solutions. 10. in this high flux and uncertain environment, emes could perhaps be better off by stepping up cooperation on all fronts, while recognising multi - polarity. one area of cooperation could be to put in place an institutional mechanism which balances the concerns of both oil exporting and importing countries to ensure stability in energy prices. emes also need to explore alternatives to reduce dependence on conventional energy sources, and give greater focus on renewables and energy efficiency. the international solar alliance, with its headquarters in new delhi, is a vivid example. it seeks to provide a dedicated platform for cooperation among financial and solar resource rich countries so that the global community benefits from the use of solar energy. 11. in closing, let me say a few words about india. real gdp growth is expected to clock 7. 2 per cent during 2019 – 20, the fastest among large economies of the world, growing by an average rate of around 7. 5 per cent in recent years. inflation has remained below target, averaging 3. 6 per cent for the period under the inflation targeting framework so far ( since october 2016 up to february 2019 ) ; the current account deficit is expected to be around 2. 5 per cent of gdp in 2018 – 19 ; and the gross fiscal deficit has adhered to budgetary targets. 12. looking ahead