India's central bank chief on Saturday said "new rules of the game" were needed for monetary policy-making, arguing that greater oversight was crucial in an increasingly integrated global economy.

Respected central banker Raghuram Rajan proposed a traffic light-style system whereby a central bank's policies could be rated red, orange or green depending on their level of harmful "spillover" effects.

"The international community has a choice. We can pretend all is well with the global financial non-system and hope that nothing goes spectacularly wrong," Rajan, governor of the Reserve Bank of India, told an International Monetary Fund conference in New Delhi.

"Or we can start building a system for the integrated world of the twenty-first century," he said.

Across the world, central banks have resorted to stark measures in recent years in an attempt to kick-start growth in their sluggish economies.

The Bank of Japan and others have cut interest rates below zero while the European Central Bank has steadily expanded its vast quantitative easing programme, where it buys bonds with money that it creates electronically.

Rajan said the impact of these "unconventional" policies on trade and capital flows outside their individual countries should be overseen by multilateral bodies such as the IMF.

"This period of slow growth is particularly dangerous because both industrial countries and a number of emerging markets need high growth to quell rising domestic political tensions," he said.

Rajan said a new international agreement similar to that set up at the historic Bretton Woods conference in 1944 may be necessary to establish the new system.