Namaskar! Good morning, I am honoured to be here today. This initiative by the CII – the Summit on Financing 3.0 – is perhaps the first of its kind and assumes timely significance in positioning itself as a beacon of light illuminating India’s leap towards its future. At the outset, therefore, I would like to express my deep appreciation of CII’s role in shaping India’s industrial and business landscape since 1895 as arguably the most visible business association in the country today. It is only befitting that I pay tribute to the CII’s extraordinary contributions by dwelling on our ambitions as a nation and the role of finance in actualising them.

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.

I am delighted to be here to inaugurate the second edition of the global conference on financial resilience organised by the College of Supervisors (CoS) of the Reserve Bank of India. The first edition of the conference was held last year in April and I had participated in the same. Since its establishment in the year 2020, the CoS has made significant contributions to strengthen supervisory capacity of not just the Reserve Bank, but also the supervisors from a few other countries who have participated in the various programmes organised by the college. My compliments to the Team CoS for their dedication in successfully carrying forward the objectives of the organisation.

It is my pleasure to be here at the FIMMDA-PDAI annual conference. This year (2024-25) is particularly special for the Reserve Bank. The RBI has entered its 90th year on April 1, 2024. I, therefore, thought it appropriate to dwell upon the journey of the Reserve Bank, especially in the context of its role in developing the financial markets in India in the recent period. I also propose to share some of my thoughts on the way forward.

It gives me great pleasure to be here at Davos for the annual meeting of the World Economic Forum. While the winter outside is cold, the warmth of coming together of eminent leaders and experts from diverse fields more than compensates for it. These meetings assume greater relevance when fundamental changes are taking place in a global scale that would potentially shape our common destiny. I thank the Confederation of Indian Industries (CII) for giving me this opportunity to speak at this event. Recent information on the global macroeconomic front has been somewhat reassuring with inflation gradually descending closer to the target, even as growth has held up better than expected. The odds of a soft landing have increased and this has enthused the financial markets. Financial conditions have eased, and markets have scaled new highs, raising concerns that they might be running ahead of themselves. At this critical juncture, certain hard facts have to be kept in mind, namely, global growth is slowing down; geopolitical situation continues to be fragile with new flash points and fear of supply chain disruptions; geo-economic fragmentation remains unabated undermining global trade; and the daunting climate related challenges are holding their ground.

Good afternoon and Namaskar. Thank you Alfred for those insightful opening remarks. I must mention that Alfred led the IMF’s Article IV India mission for the 2021 consultations. The sheer weight of that experience and deep understanding of Indian conditions is reflected in his views. I would also like to commend Alfred and his co-editors for a comprehensive evaluation of India’s financial system and very valuable recommendations on the way forward in a recent book evocatively titled “India’s Financial System: Building the Foundation for Strong and Sustainable Growth”.

I am glad to see Mr Thomas Helbling from the Asia and Pacific Department of the IMF in this session, and I look forward to hearing from him.

I thank our host and SEACEN EXCO Chair, the National Bank of Cambodia, the SEACEN Centre and Dr. Mangal Goswami, Executive Director, and the BIS for inviting me to speak in this distinguished forum. In particular, I am grateful to Deputy Governor Sum Sannisith for so graciously writing to me to participate in this 16th SEACEN-BIS High Level Seminar.

The Backdrop

It is widely believed that during the next two decades – if not for longer – the centre of gravity of the global economy will shift eastwards to Asia. The IMF’s Regional Economic Outlook for Asia and the Pacific indicates that this region will contribute about two-thirds of global growth in 2023 itself. India will account for a sixth of world output growth in 2023 and 2024. In terms of market exchange rates, India is the fifth largest economy of the world and the third largest economy on the basis of purchasing power parity. Our assessment is that by 2027, India will be a US$ 5 trillion economy and the third largest in the world even by market exchange rates. A key driver in this transformation is likely to be the window of a demographic dividend that opened up in 2018 and will probably last till the 2040s, going by fertility and mortality rates. Already, we are the most populous country in the world at 1.4 billion and the youngest at an average age of 28 years. The other major catalyst of India’s progress will be the pace and quality of financial sector development, which is the theme of my address today. It is anchored by a few slides.

1. A very good morning to all of you. It is indeed a pleasure to be here amidst all of you today at the 17th annual conference of FEDAI. These annual events of FEDAI provide an excellent opportunity for the exchange of ideas and thoughts among the foreign exchange market participants and I am sure this one will be no exception. 2. Today, as I speak to the market veterans assembled here in Cairo, it strikes me that it is fitting perhaps that this conference is being he