Rajan said an interest rate cut won't by itself lead to higher economic growth
The Reserve Bank of India kept interest rates unchanged at 8.0 percent on Tuesday as widely expected, staying focused on containing inflation while adopting a more dovish tone in response to the government's call for help to revive economic growth.
Global investment firm Citigroup is bullish on Indian equity markets.
Analysts expect modest recovery in Indian economy.
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Large state-run entities and business houses will not be allowed to set up small finance banks, which will have to comply with statutory reserve requirements.
CLSA says government actions to facilitate investment more important for revival than a token monetary easing.
CLSA expects annual net inflows of $15 billion from domestic investors over the next few years in India.
The central bank will come out with fresh set of guidelines for companies applying for on-tap bank licence
Cleaning up India's grubby business climate is top of the agenda for both regulators and the government.
Rajan added "many" market participants were convinced that India could hit the RBI's target of bringing down consumer inflation to 6 percent by January 2016.
In New York market, the dollar continued to weaken against its rivals yesterday on a day devoid of major data releases out of Europe and the US.
In the long run, the decision could bring clearer rules to a sector that has failed to provide India with enough power because it has been so hamstrung by confusion and scandals over concessions allegedly handed to government cronies.
De-allocation could raise import bill by $3 billion, add to coal shortage.
The bank says valuations are still high, foreign mutual funds are still 'very overweight' on Indian shares.
The domestic currency had lost 49 paise to close at a three-month low of 60.55 on Thursday on capital outflows after the US Fed trimmed its monthly bond buying programme by another $10 billion.
The Bombay Stock Exchange has resumed trading after three hours on Thursday.
n New York market, the dollar posted second-quarter losses against nearly all major rivals yesterday, with the exception of the euro.
These sectors have underperformed the wider market over the past year and are seen having far more upside potential if the economy picks up thanks to Modi's reformist agenda.
The investment bank also says no ministries were merged even as some ministers were given more than one portfolio.
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The benchmark has gained 2 per cent this week on continued hopes the incoming Narendra Modi government would unveil substantial economic reforms.
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