The Reserve Bank of India has set up a monitoring cell for early reporting of frauds to investigating agencies, governor Raghuram Rajan said. Stating that quick and effective investigation by the agencies is very important to check frauds, Rajan said at an event in Bengaluru that the fraud monitoring cell will coordinate the early reporting of fraud cases to the investigative agencies. He said the practice of a banker working closely with an investigative agency will send a strong message to the borrower and make him cough-up the money owed. Those who have diverted money out of their companies, especially into highly visible assets abroad, may get a stern message from the bankers sitting together with investigative agencies that the alternatives to repayment can be harsh, he added. He added that RBI has given a lot of flexibility to banks to deal with genuine cases of loan losses with measures like 5/25 scheme of rescheduling loans, but warned about its misuse. He also said he does not favour the committee-based approach of loan sanctioning as it diffuses responsibility for decisions.