As competition reduces their profitability, their capacity to carry out mandates and still earn enough to survive diminishes. So while acknowledging the value of mandates at the RBI, we have tried to make them more effective. For example, the list of sectors eligible for priority sector treatment has been revised, with an emphasis on targeting the truly excluded.
As regulators, however, we also do recognize that system-level outcomes may turn out to be different from the sum of the behaviors of individual stakeholders. All these challenges simply mean that systemic risk crisis management, and invariably financial stability at large, is a collective effort. Ladies and gentlemen, the ultimate objective is to improve the welfare of current and future generations.