``The Reserve Bank of India (RBI) is, therefore, likely to implement convertibility only in a phased manner,'' he said.

Addressing the students of the South Indian Education Society's (SIES) College of Management Studies, Radhakrishnan said, in the wake of such currency crises, he forsees an active market for derivatives in the future as corporates would increasingly need risk hedging mechanisms like options and futures.

In the next millennium, there would be a widening and deepening of the Indian financial market as restrictions on cross border flows disappear and there would also be a larger deregulation of financial services by the government, the SBI chief said, after giving away the academic awards to thestudents.

The member countries of the World Trade Organisation (WTO) have recently reached a deal to significantly ease international trade barriers in the financial services, industry covering trade in banking, services, securities and financial information. Increased competition from abroad could also mean more failures and ultimately only the most efficient would survive, Radhakrishnan added.