One who here has left behind both merit and demerit, living the holy life, walking in the world with understanding — that one is called a monk.

Puññañca pāpañca bāhetvā — having left behind both merit and demerit: the true monk has transcended even the duality of merit/demerit. Not only has one abandoned evil but also does not cling to good as personal possession.

Brahmacariyavā — living the holy life: brahmacariya is the pure life, the holy life. Not just celibacy but the totality of purifying practice.

Saṅkhāya loke carati — walking in the world with understanding: saṅkhāya is with understanding, with discernment. The true monk does not flee the world but walks in it with clear understanding.

This verse presents the ideal bhikkhu: not one who avoids the world but one who traverses it with understanding, having transcended the duality of good and evil.