would be poorer and in the short run there would be immense disruption. ” 11. the indian forex markets have been fairly stable in recent months. as you know, the reserve bank is mandated to maintain orderly conditions in the foreign exchange market. its intervention in the forex market is solely directed at curbing sudden turbulences not backed by the economic fundamentals. as has been said repeatedly, market operations are not intended to achieve any target exchange rate or band of rates. it must be pointed out that the exchange rate dynamics in india for more than a decade has been driven by capital flows rather than current account balances. as an aside, india has mostly run a current account deficit, notwithstanding a bilateral trade surplus with the us, marginally more than usd 20 billion during 2018. though long - term flows related to fdi and long - term debt have been fairly stable keeping in tandem with the economic fundamentals, the portfolio flows have their own dynamics depending as much on 2 / 3 bis central bankers'speeches attractiveness of returns of indian assets as the global factors determining their risk appetite. gyrations in the forex market in these circumstances leave no option other than market intervention to restore orderliness in the market. one also need to bear in mind that india ’ s forex reserves are borrowed reserves and not built out of export surplus. inasmuch as it provides a bulwark against sudden flow reversals, it enhances the country ’ s ability to cope with the fall out and indeed, contributes to global stability as well. 12. the policy regime is also oriented to providing adequate instruments of hedging to all resident economic agents who have exposure to a foreign currency as well as all non - residents who have a rupee exposure. the onshore markets are fairly deep and liquid but needs further strengthening. there is a wide menu of hedging instruments available and further expansion would be in keeping with understanding of their risk implication. in recent times, global institutions and investors have shown a healthy appetite for rupee denominated assets, which while ensuring flow of foreign exchange protects the indian issuers from exchange risk. this trend needs to be given further policy nudges. 13. in fine, i would like to say that though there are discouraging portents for the global economy and uncertainties arising from trade tensions and geopolitical developments, i am optimistic that coordinated policy response and dispute resolution within a multilateral framework will see us through the day. 14.

one issue that bedevils public sector banks is that of compensation. how do they attract new talent and match the salaries and the compensation flexibility being paid by consultants, by it firms, by multinationals, by private sector banks? is the quest for talent lost ab initio? here it may be stated that while the traditional psychological contract of long term employment for loyalty may have been undermined, quantitative solutions of the 1990s are not necessarily the answer. money can be matched and topped by competitors – the pay packet may not be the only compensation that attracts talent. the monetary, social and psychological needs of talent today are in a melting pot. it is this ambiguity that can be a source of opportunity for public sector banks. today, the ‘ loyalty contract ’ is being replaced by a complex mix. there are a host of non monetary benefits that an organisation can offer ranging from job content, work exposure, project challenge, working at the cutting edge, working with a charismatic leader, flexible work environment, early leadership roles and positions of accountable influence, high - value, visible or high - profile assignments, cross - functional roles, training facilities, opportunities for personal growth, opportunities to build a resume in a particular work area, community bonding, location benefits or for that matter independence and space amongst others. understanding what it takes to foster a productive work environment, often alluded to as the " employee value proposition ", essentially entails non - discriminatory, hostile - free workplaces with flexible and dynamic hr policies that enable an environment where employees feel included and valued, where commitment and motivation is maximized and where an organization needs to spend fewer resources on managing employee grievances. it is up to the creativity of the public sector banks to turn their constraints into an opportunity to create such employee value propositions that appeal to the talent these banks wish to recruit. it also forces them to revamp their own talent requirements, their job content and reposition themselves as more agile players in the talent market. in fact, effective recruiting is the beginning of effective retention. matching between tasks and talents is a challenging problem and it is essential for allocational efficiency that people get allocated to right occupations. refashioning the recruitment process may well therefore be the precursor of an effective talent management strategy. this may include identification of key positions and turnover risks associated with these positions, and competency / behavioural - based selection criteria that support the retention strategy and business drivers. only a carefully designed and integrated set of initiatives that