priority sector. resultantly, the priority sector vertical is reduced to a data collection and statement generating vertical. further, i am also not sure how many bank boards discuss priority sector strategy in the board meetings. 6. it is necessary that all these verticals evolve within themselves and come together as a cohesive group, prepare a strategy and then take it to the board for broader discussion and guidance. the priority sector activity should not remain confined to being a mere data collection exercise. is there a linkage between plan approved by slbc and plan of the priority sector vertical? 7. there are several agencies involved with priority sector activities of banks. there is the slbc structure wherein district credit plan ( dcp ) is prepared and the lead bank offices operate at district level. nabard prepares the potential linked credit plan ( plp ), slbc adopts it and then it is distributed amongst all banks. i have a suspicion that between the overall priority sector strategy and what happens at the slbc and dcp level, there may not necessarily be any logical linkage. in rbi we are looking at revamping the entire structure of slbc and as such, some of these will undergo a change. data extraction and its implications for priority sector 8. currently we have a project underway within rbi which would enable extraction of data directly from banks ’ core banking systems ( cbs ). in the entire credit planning exercise data infirmity has been a major factor and in some sense, has become an impediment for banks in arriving at right conclusion and right strategies. this project is at a fairly advanced stage now. however once this is implemented, it should not once again be seen as a data cleaning and compliance exercise. this is a great opportunity for banks because they can use the data, apply analytics and prepare the right sort of strategy. they can decide on their focus area and product once this robust set of data is available. it is important that the senior - level functionaries appreciate this exercise in that sense. research 9. the last point that i would like to make on the broader policy and strategy aspect is that time has come for individual banks to also invest in research - not very intense academic researchbut research to the extent that is helpful in making policies and business strategies relevant for their own purpose. 2 / 7 bis central bankers'speeches 10. let me now come to some recent changes and emerging opportunities in the priority sector. diversified universe 11. in the last revision the scope of

to continue the growth momentum, the positive impact is expected to persist. third, rapid growth of large economies in asia may continue to generate significant opportunities for expanding the markets for other economies, especially the neighbouring economies, and these could certainly include tourism and financial products also. fourth, a few advanced economies tended to experience some discomfort in the rise of asia since competitive forces put pressure on wages of some categories of workers, though, as consumers, the general populace benefited from the process. fifth, there are additions to demand for energy due to rapidly growing asia and, according to some, thus impacting oil prices. in terms of the existing levels of energy consumption, asia is still a minor player in the overall energy market. further, many attribute the rising oil prices to financialisation of commodities and speculation. no doubt, over the medium to long term, there is scope for improving efficiency in the use of energy in asia. the energy economy of the world and the rise of asia may continue to interact in a dynamic setting in future also. sixth, the economic growth in asia has resulted in an unprecedented number, in millions, of people moving out of poverty levels every year thus generating demand for food items, including cereals and milk. the structural increase in demand for food on account of asia may continue for several years. while demand for food is relatively inelastic, the supply side is often influenced by several factors, including political economy considerations. the problem is accentuated by the uncertainties in the global climatic conditions and increasing financialisation of trade in these commodities. finally, the monetary authorities are facing very complex challenges, since traditionally oil prices were treated as “ shocks ” and food prices are also treated as some sort of a “ shock ”. it is now realised by the monetary authorities, in advanced economies also, that food prices have significant impact on inflation - expectations, which are vital for the conduct of monetary policy. in developing economies, the problem is more acute since the weight for food prices in price indices is large. way forward, all of us recognise the growing importance of asia in an inter - dependant world. hence, asia needs to be conscious of the challenges to public policy and the international community would also gain by being supportive of policies that benefit asia and the global economy over the medium term to longer term. such collaborative and mutually reinforcing policies are critical for growth and stability in all regions. let me recount a few important challenges in asia. first, two - thirds of the world