in q1 of 2012 – 13. at 5. 5 per cent, it was marginally better than in the 5. 3 per cent in q4 of 2011 – 12. while this is not a material improvement, when juxtaposed with the recent policy measures there is hope that growth would improve in coming quarters and more so next year. rainfall has been deficient by 8 per cent from the long period average in 2012 bis central bankers ’ speeches monsoon season. the deficiency during june and july 2012 has adversely impacted the kharif crop. however, good rainfall in august and september have improved the soil moisture content and reservoir levels and raised the prospects for a good rabi crop. as we see subsequent rounds of crop estimates, the deficiency of about 10 per cent in case of food grains and oilseeds is likely to be reduced, thus providing a further silver lining. india grew at a rapid pace with an average growth of 8. 7 per cent during 2003 – 04 to 2007 – 08 essentially because investment boomed, especially in infrastructure such as power, roads and telecom. in the last three years of this period growth averaged 9. 5 per cent before the lehman crisis changed the world. india ’ s potential growth was assessed at nearly 8. 5 per cent during this period. india ’ s growth dropped to 6. 7 per cent during 2007 – 08 due mainly to spill over from global financial crisis. india, however, stood out as an island of calm that withstood global financial tsunami. its growth dropped less than its peers and it staged a v - shaped recovery clocking 8. 4 per cent growth over next two years. however, the euro area crisis, the rising structural problems and high inflation combined to bring about a precipitous fall in india ’ s growth. the growth dropped to 6. 5 per cent in 2011 – 12 – lower than the crisis - affected growth of 6. 7 per cent in 2007 – 08. more importantly, growth has averaged 5. 4 per cent over last two quarters. is this the new normal? there are strong reasons to believe otherwise. while potential growth may have fallen, we are clearly running a negative output gap with realised growth below potential. with current momentum, we can also recoup our lost potential and after a few years start growing back at 8 – 8. 5 per cent on a sustainable basis. what is important at this stage is to further improve macro - economic conditions by lowering twin deficits and to ensure that

banking initiatives have significantly driven the digital transformation of banking services. they also demonstrate hong kong people ’ s willingness to embrace fintech ; and set us up for further fintech developments. customers ’ digital appetite will outlast the pandemic 9. unfortunately, the city and the world were subsequently battered by covid - 19. but hong kong ’ s pre - pandemic fintech efforts were sufficient, for the time being at least. so we were able to enjoy largely uninterrupted high - quality digital financial services during the pandemic, allowing a wide range of commercial activities to continue in the city. in fact, covid - 19 demonstrated the sheer power of fintech. fintech can fulfil gaps when traditional banking services are compromised. 10. now, we must recognise and accept the fact that covid - 19 has permanently changed customers ’ behaviour. their digital appetite will outlast the pandemic. the only way to satisfy their increasing digital appetite is to increase our fintech offerings, which in turn, will make them hungrier for more. 1 / 5 bis central bankers'speeches 11. the hkma believes now is the right time for the banking industry to double down on fintech development. it is time to work together as a whole to embrace the numerous untapped possibilities that fintech can bring. fintech has the potential to become a major economic growth engine in the post - pandemic era ; and it would be in the banking industry ’ s best interests to be a part of this progression. 12. with this in mind, we have talked to a lot of stakeholders in the past few months to map out what needs to be done to take fintech development to a higher level. our conclusion is that we must build an ecosystem where the value of fintech is experienced across all levels and by all groups of people. when we bring sufficient benefits to customers, investors, and the public at large, we will create a virtuous cycle that generates even more demand for fintech solutions, in turn energising the whole industry. 13. as we build this ecosystem, we also need to ensure that we maintain the right factors for the ecosystem to grow further. data, infrastructure, talent, and funding will all be vital to this growth. this thinking process has culminated in a strategy that we call fintech 2025, which i am pleased to share with you here.. all banks go fintech 14. the