RBI's Deputy Governor Rakesh Mohan said that India's approach to the financial sector reforms has been gradual, consistent and constant at the times of slowdown hitting the economy.

Speaking at a function, Rakesh Mohan said, "Our approach to the financial sector reforms has been gradual, consistent and constant...you cannot take risks in a low-income country."

In order to counter the impact of economic slowdown in India, RBI has been following tight monetary policies at times when the country witnessed huge capital outflows.

Further Mohan said that emerging markets including India are expected to observe a negative capital flows in 2009. At the same time, the Indian economy is likely to hover at the high growth path in the coming years. "India's fundamentals remain strong... Indian economy should be able to recover fast and return to the 9 per cent plus growth (over the next few years)," said Rakesh Mohan.

Also there is positive growth anticipation on the bank credit front but the pace is expected to be lower as compared to the last year.

The banking industry on the whole is going to remain robust with strong asset quality and adequate capital, said Mohan. "So far we have not observed any banking problems in India. All banks are strong and well capitalized... Our NPAs are also low," stated Mohan.

Rakesh Mohan has recently resigned from his post of Deputy Governor of the Reserve Bank of India. He has stepped down before the end of his term in order to take up a teaching assignment at Stanford University in the United States.