unethical elements at the earliest opportunity to ensure the credibility and the efficiency of the credit system in the country. several attempts are already underway, one of which is the establishment of a central fraud registry, which will enable quick sharing of information on entities found to be defrauding banks. rbi and iba together have also taken upon themselves the circulation of “ caution advices ” relating to all types of frauds, including those pertaining to loans and advances. efforts also need to be made to alienate the willful defaulters and fraudsters and debar them from accessing the banking system for further finance. similarly, there would also be a need to the deviant behavior within the banking community through effective vigilance practices, quick staff accountability measures and timely institution of criminal cases in fraud cases. a bis central bankers ’ speeches message needs to go down loud and clear that intentional wrong - doings will not go un - punished and lax credit monitoring or reckless sanctions will be appropriately dealt with. conclusion 10. i am sure that not just rbi, but an industry body like the assocham, the large assembly of bankers and borrowers gathered here are all seized of the real problems that beset the financial sector today. the need is for taking strong and timely measures. i hope the seminar would deliberate on some of the issues that i have raised today and do some soul - searching. with giant strides that have been made in it, the banks should not find it difficult to exercise a stricter oversight regime to identify early sign of impending default. i would also exhort the borrowers ( individual or corporate ) to understand their basic responsibilities, co - operate with lenders and adhere to a general code of conduct and discipline. the minimum one can do is to adhere to the loan agreements. use of judicial channels should not be too prolific and frequent ; instead, these should be used to foster better borrower protection rather than to undermine the credit discipline in banks. any lenderborrower relationship can only survive on mutual trust and co - operation ; breach of trust can ultimately become either an offence ( under criminal law ) or a civil wrong thereby defeating the credit system in india. 11. i thank you all for inviting me here to share my thoughts. i wish the conference all success. thank you. bis central bankers ’ speeches

interest rates. though characterised by significant downside risks, over the medium term, the prospects for the global economy are by and large positive. for the indian economy, the evolving economic and business environment exhibits a number of encouraging signs that suggest reinforcement of the robust economic growth demonstrated in recent years. first, increase in the gross domestic saving rate to levels around 30 per cent, coupled with sustained absorption of external savings of about 2 per cent of gdp, would provide the potential for attainment of an accelerated growth trajectory. second, the micro structural reforms undertaken over the years have enabled continuing productivity gains in the real sector. third, the reform process involving widening and deepening of the financial sector, along with improved regulation and supervision, has also yielded encouraging results, as reflected in the productivity measures relevant for the sector. fourth, there is evidence of increasing business confidence as measured by various business expectation surveys and improvement in the investment climate. this is also corroborated by signs of enhanced levels of foreign direct investment. 3 / 7 fifth, the most progressive and dynamic of the indian companies are manifesting increasing levels of global presence through acquisitions and higher outward foreign direct investment. the attainment of domain knowledge through such activities, along with best practice business knowledge, and economies of scale in marketing may enhance the productivity growth of indian business. finally, it is noteworthy that indian business has managed to exhibit impressive growth performance in recent years in terms of most parameters despite the presence of significant constraints posed by infrastructure. it has also displayed resilience in terms of the ability to cope with adverse developments such as oil price increases. despite the positive factors for medium term outlook, there are some critical issues that need to be addressed for maintaining the current momentum of growth with stability. first, the poor state of the physical infrastructure, both in terms of quantity and quality, has been rightly receiving the focussed attention of the business class and the policy - makers. there are some reasons to expect a satisfactory outcome, provided the improvement in regulatory framework is sustained. the current investments are demand - led and therefore, are likely to be completed with least gestation periods, coupled with a rapid payback on completion. technological developments and rapid enhancement of domestic construction capabilities should aid the process of speedy and efficient implementation. given the healthy fundamentals of the domestic financial sector and the enhanced interest of foreign investors, funding should not pose any serious problem. second, fiscal consolidation is taking place both at the centre and states and there is greater consensus now on