Jalan calls for flexibility in interest rates

"In terms of regulatory mechanism, we are trying to move towards internationally accepted standards in transparency and accounting," the RBI governor said.

Expressing concern over lack of public confidence in private sector as deposit takers, he quoted a recent survey to point out that only 15 per cent of depositors felt their money was safe in private institutions.

"We must work out a mechanism to make private players more accountable and answerable. The government, RBI and private sector should come together and apply their collective mind to reduce fiscal imbalance," Jalan said.

He expressed confidence that India, given its capacity and capability and a reasonably diversified capital finance system, would emerge as the most vibrant economy in the 21st century. The two-day international conference is aimed at equipping the corporate India with emerging global opportunities guided by technological changes.

It would focus on globalisation, technological innovations and deregulation which have dramatically altered the landscape for corporate India, the chairman of the ‘Indian Fianance Forum’ Ramesh Gelli said.

Jalan said Indian economy has demonstrated, in the last one decade, its capacity to grow steadily, inspite of the external crisis and substantial progress had been achieved in making the financial system strong.

He, however, said there was a large scope to increase financial savings which now accounted for 10 per cent of the GDP. "The process of reforms can not be completed unless different segments of policy making apparatus come together and gear up to implement the agenda for the future," the RBI governor said.

Andhra Pradesh Chief Minister N Chandrababu Naidu, in his address, said the country’s economy was growing strong despite political instability at the centre in the last three years.

"If we can increase our savings rate from the present 26 to 30 per cent, we can achieve a growth rate of eight per cent in near future," Naidu said.

Pointing out that information technology would continue to be a key factor driving the global economy in the 20 years, the Chief Minister spoke about his vision of harnessing emerging technologies for the benefit of common man and to reform the state administration to make it transparent, responsive and accountable.

Claiming that AP was the first state in the country to go in for digital governance, he sought suggestions from the CII members on funding innovative infrastructure projcts in the state.

The executive vice-president of International Finance Corporation (IFC) and managing director of World Bank Peter Woicke, giving a global perspective of financial sector performance, said the IFC would seriously consider about participating in privatisation of one or two Indian public sector banks in future.

"The recent increase in private sector participation in India’s commercial banking system is having an impact on the competitiveness of the public sector banks leading to an increased need to re-vitalise and re-energise a number of the country’s public sector institutions," Woicke said.

Pointing out that banks and other Financial institutionswere in the process of dramatic organisational and technological changes worldwide, he said international capital and technology was available to any Financial system prepared to undergo sincere and transparent transformation.

Paying tribute to the prowess of Indian informationtechnology industry, woicke said this strength provides both the it and Financial sectors an opportunity to leap forward.