This experiment is extremely critical for providing essential public services at the doorsteps of the poor people. The teething problems and legal snags confronting the local governments if unresolved, could create a potential difficulty in reaching out to the poor. These risks, except those arising out of adverse or unanticipated exogenous shocks, can be mitigated through a series of reforms.
A proposal describing a term deposit facility was recently published in the Federal Register, and the Federal Reserve is finalizing a revised proposal in light of the public comments that have been received. After a revised proposal is reviewed by the Board, we expect to be able to conduct test transactions this spring and to have the facility available if necessary thereafter.