I may mention that a medium-term framework for urban co-operative banks up to the year 2010 has been drawn up in order to facilitate the development of this sector into a strong and vibrant system comprising entities conforming to all prudential requirements. The Standing Advisory Committee for Urban Co-operative Banks is increasingly being used for continuous dialogue with the various stakeholders of the sector.
If private market participants believe that government is protecting their interests, their own efforts to do so will diminish.’1 We have tried to minimise those perverse incentives. Of course, to some extent this approach only works where there is a clear framework of company law which makes it clear that company directors and managers have unambiguous responsibilities. Having agreed accounting rules is important.