1. Chairpersons and Directors of the Boards of Small Finance Banks; Chief Executive Officers of SFBs; Executive Directors, Chief General Managers and colleagues from the Reserve Bank of India; ladies and gentlemen. A very good morning to all of you. 2. It is an honour to address this distinguished gathering in the inaugural conference of Board of Directors of Small Finance Banks organised by the RBI. As has been mentioned, this conference is in continuation of the Reserve Bank’s efforts to reach out to its supervised entities through a direct dialogue with their Boards and Top Management. Our objective is to reaffirm the importance of good governance for maintaining financial stability and fostering sustainable growth.

I am delighted to have been invited by the Nepal Rashtra Bank (NRB) to deliver the inaugural Himalaya Shumsher Memorial Lecture. I deem it as a privilege. I place on record my appreciation of the Nepal Rashtra Bank for initiating this lecture series in honour of Shri Himalaya Shumsher Rana, the first governor of NRB from1956 to 1961. He contributed immensely to the development of Nepalese monetary and financial systems. His efforts laid the foundation for many of Nepal's key financial institutions and contributed significantly to the country's economic development. Nepal and India have enjoyed a long standing relationship that goes back into history. It is not just a relationship between the two countries, it is also a close people to people relationship. The Nepal Rashtra Bank and the Reserve Bank of India also share a close relationship based on mutual co-operation.

Deputy Governor Swaminathan J, distinguished delegates from International Association of Deposit Insurers (IADI) and global deposit insurers, board members and officers of Deposit Insurance and Credit Guarantee Corporation (DICGC), officers of RBI, ladies and gentlemen, good afternoon to all of you. At the outset, I would like to thank IADI and DICGC for inviting me for delivering the valedictory address at the IADI Asia-Pacific Regional Committee International Conference being held in the beautiful city of Jaipur.

1. Distinguished Guests, Deputy Governor Dr Michael D Patra, Deputy Governor Shri M R Rao, Board of Directors of DICGC, colleagues from DICGC and RBI, ladies, and gentlemen. A very good morning to all of you. 2. It is, indeed, an honour to address this distinguished gathering of global deposit insurers. Deposit insurers, as vital pillars of the financial safety-net system, play a crucial role in bolstering public confidence in the banking sector and fostering overall financial stability. My compliments to the organizers of this Conference—the International Association of Deposit Insurers (IADI), which has excelled as a global standard-setter, the Asia Pacific Regional Committee (APRC), and the Deposit Insurance and Credit Guarantee Corporation (DICGC)—for their exemplary efforts in bringing this event to fruition.

Mr. Alejandro Lopez, President, International Association of Deposit Insurance (IADI), Dr. Eva Hupkes, Secretary General, IADI, Mr. M. Rajeshwar Rao, Deputy Governor, Reserve Bank of India (RBI), distinguished representatives of the IADI and the Asia Pacific Regional Committee (APRC) Secretariat, chief executive officers (CEOs) and officials of deposit insurance agencies, delegates from central banks, eminent speakers and panellists, invitees representing banks in India, and my colleagues from the Deposit Insurance and Credit Guarantee Corporation (DICGC) and the Reserve Bank of India (RBI), good morning to you all.

Good afternoon ladies and gentlemen, At the outset, let me thank the organisers for inviting me to deliver this address and convey my thoughts at this prestigious event. We, as central bankers, interact with various stakeholders on different occasions and diverse gatherings like this provide us an opportunity to reflect on issues which straddle not just the world of finance but also impinges on wider scheme of things. The idea is to flag issues which have wider ramifications beyond the conventional financial risks. Therefore, while I would dwell upon the Indian financial outlook, I would like to avail of this opportunity also to discuss on the issue of climate change and the role of financial entities in the transition process towards a more sustainable growth.

Ladies and gentlemen, a very good morning, I am happy to be here this morning and engage with you at this forum. Keeping in view the theme of the event, I thought it would be appropriate to discuss a few issues around the risk, compliance and internal audit, collectively known as assurance functions, as they help identify and manage risks for sustainable growth of financial entities. From a regulatory and supervisory perspective too, Reserve Bank attaches utmost important to the assurance function and therefore, to ensure that there is alignment between our perspectives and to communicate our expectations, we feel a continuing dialogue on this issue is extremely important.

I am happy to be back at the Financial Express Modern BFSI Summit. I remember having participated in the June 2022 edition of this summit where I had spoken on ‘Disruptions & Opportunities in the Financial Sector’. The macroeconomic conditions back then were very different and challenging to say the least, as we were grappling with overlapping shocks from the war in Ukraine and the surge in inflation at a time when the world was still recovering from the Covid-19 pandemic. Since then, we have come a long way. Amidst global challenges and uncertainties, India stands out as a fast growing major economy with stronger macroeconomic fundamentals and a healthy and resilient financial sector.

Shri Ajay Bhushan Prasad Pandey, Chairperson, National Financial Reporting Authority; Shri M R Rao, Deputy Governor Reserve Bank of India; Executive Directors from Reserve Bank of India; CA Ranjeet Agarwal, President Institute of Chartered Accountants of India; Auditors and Chief Financial Officers from the Banks and All India Financial Institutions; my colleagues from the Reserve Bank of India; Ladies and Gentlemen. Good morning.

I am delighted to be here today to convey my thoughts on the issue of statutory audit of commercial banks and AIFIs. In many ways, we, as Regulators/ Supervisors and you as Auditors, share a common goal. Auditors play a very crucial role in ensuring the health of the financial system as they assist in maintainance of regulatory oversight by ensuring that the financial statements present a true and fair picture of the affairs of the regulated entity. The statutory auditors play a significant role in maintaining stakeholder confidence in audited financial statements and this is particularly important in the case of banking industry where the entire edifice is built on ‘trust’ and the biggest external stakeholders, i.e., depositors are fragmented and unorganised. Therefore, the Reserve Bank has a strong interest in promoting sound and high quality accounting and disclosure standards for the banking and financial industry as well as in having transparent and comparable financial statements that strengthen market discipline