Need to check flaws in banking system: Rajan

Hyderabad: Reserve Bank Governor Raghuram Rajan on Friday said there is a need to check flaws in the banking system to ensure that defaulters are not let off scot-free.

"We have to check the flaws in banking system where a defaulter can not escape with impunity," Rajan said.

The banking sector is currently struggling with high non performing assets (NPAs).

Delivering the annual Sardar Vallabhbhai Memorial Lecture at The Sardar Vallabhbhai Patel National Police Academy here, Rajan also called for "focus" in implementation of economic reforms and improving capacity at every level of economy and village and national infrastructure to maintain growth and check inflation.

"Our country is today facing number of challenges regarding implementation of economic reforms and we are putting it back on the right path by certain measures.

"We need to focus in implementation and improve capacity at every level of the economy. We should concentrate on village infrastructure and national infrastructure as well to keep economic growth and check inflation levels," Rajan said.

He stressed on the role of government spending in reviving growth, especially because exports are not doing as well as in the past.

"There are certain aspects like macro stability, human capital, business environment, taxation, judiciary and allocating resources that play a key role in boosting our economy.

"We need to constitute state level co-ordination committees to monitor unregistered and illegal operators with the Chief Secretary, DGP and District Collectors in the committees.

"Today, the new mantra in the country is transparency at all levels," Rajan was quoted as saying in a statement issued by the Academy, delivering a lecture on `Reforming India's Economic Institutions'.

Earlier, Rajan paid homage at the Police Martyrs' Memorial.