see ” approach before they issue regulations for e - money. nevertheless, i would not be concerned about possible competitive disadvantages for europe resulting from the different speed of regulatory initiatives in this field. the reason is quite obvious : e - money should remain a national or european business for quite some time and transatlantic e - money services may not evolve easily. in addition, the regulatory demands for e - money business should not pose a real constraint for well run e - money systems. moreover, we must not miss the optimal point of time for regulating e - money. waiting for too long could mean that we end up with very divergent systems in europe. this in turn would make it extremely difficult to have a european passport and single market in this area. against that background the envisaged european directive on e - money is expected to improve market development. v the third area you mentioned is the current review of the capital adequacy framework by the basel committee. naturally, differences of opinion exist. one prominent example, which has been cited various times in the press, is the use of external versus internal ratings for assessing the banks ’ credit quality. with regard to the basel accord as such, aspects of competition may arise for both the banking sector and non - banks, especially small and medium - sized companies. it is important that the basel rules do not cause competitive disadvantages for countries or specific sectors of the economy. for this purpose, common european positions should be formulated wherever possible. without prejudging the negotiations in basel, there are good prospects that competitive distortions will be avoided by, for example, allowing the use of banks ’ internal ratings. considering the revision of the basel accord as a whole, there are still many details which have to be worked out and require our full attention. but, in essence, there seem to be fewer differences of opinion than press reports sometimes suggest. americans and europeans alike favour a more risk - based assessment of credit portfolios, the introduction of a supervisory review process to better highlight qualitative aspects of financial oversight, and the strengthening of transparency and market discipline. the recent financial crises in asia should have revealed to all regulators ( and, in my opinion, to the public at large ) the need to promote financial stability worldwide. i am optimistic that the basel committee will resolve all outstanding issues by autumn 2000 and propose a harmonised regulatory framework which will be appropriate for capital market - oriented as well as bank - based financial systems. to close, let me under

, as it will help them in expanding their business operations to newer segments of the population. globally, it is observed that commerce for the poor is more viable than commerce for the rich. financial inclusion needs to be pursued in a commercially viable manner, which is possible only if the entire suite of products including credit products, remittance services and deposit products are offered to customers. the commercial viability of financial inclusion efforts is essential for ensuring long term sustainability and scaling up of this business. the failure of financial intermediaries to ensure effective implementation of financial inclusion efforts as a viable business model indicates the lack of basic financial literacy on the part of these financial intermediaries. institutional framework in india one critical advantage that india has in its financial literacy and financial inclusion efforts is the strong institutional framework in place for guiding its implementation. we have the financial stability & development council ( fsdc ) headed by the union finance minister which, inter alia, has been mandated to look after financial inclusion and literacy efforts. with heads of all financial sector regulatory authorities being part of the fsdc, it seeks to ensure inter - regulatory co - operation for attaining the stated goals. fsdc has constituted a sub - committee to focus solely on financial inclusion and literacy. in our multi agency approach, reserve bank has taken a lead role in spreading financial inclusion and financial literacy, both in terms of creating an enabling policy environment and providing institutional support. one of the important tasks that the fsdc sub - committee has taken up is to formulate the national financial literacy strategy document with the following objectives. ( i ) create awareness and educate consumers on access to financial services, availability of various types of products and their features. ( ii ) change attitudes to translate knowledge into behaviour. ( iii ) make consumers understand their rights and responsibilities as clients of financial services. financial literacy – ideally start early in schools it is well recognized that to be effective, financial literacy initiatives should ideally commence at school level although, even at a later stage adult education would provide substantial benefits. financial education at the school level would involve teaching the basics concepts for laying a strong foundation. the groundwork for this sort of conceptual understanding is best laid in a formal educational setting. the reason why it is important to teach financial education in schools is also due to its multiplier effect on the society as they would be in the bis central bankers ’ speeches best position to act as ambassadors for the spread of financial education in their surrounding environment. in india, therefore