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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.
Rajasthan has taken the lead on structural reforms which could help India attract business and employ a fast-growing workforce.
In the offshore non-deliverable forwards, the one-month contract was at 62.26/36, while the three-month was at 62.83/93.
It doesn't appear to be happening yet, even though India's stock market has been Asia's best performer this year.
Industrial production was upwardly revised to 0.5 per cent year-on-year in August from 0.4 per cent earlier.
Consumer food price inflation, under a new series published by the government, eased to 5.59 per cent last month from 7.67 per cent in September.
The Reserve Bank of India (RBI) raised the minimum capital requirement for so-called shadow banks and tightened rules on deposits and bad loans to avoid any potential risk to the economy from these rapidly growing finance firms by regulating them like traditional banks.
Foreign investors have bought around $2.4 billion in both debt and equity so far in October, pushing the total inflows to nearly $36 billion so far in the year.
The partially convertible rupee closed at 61.45/46 per dollar, weaker from Wednesday's 61.35/36.
In the offshore non-deliverable forwards, the one-month contract was at 61.56/66, while the three-month contract was at 62.16/26.
The RBI's warnings signal its concern that unhedged firms could be a vulnerable link should global markets buckle.
For now, the upside appears to offset damage done to exports by weaker global demand.
Signs of a strong pickup in hiring by companies are adding to the rosier outlook for Indian households.
Benchmark 10-year bond yields hit a 13-month peak as bond traders priced in more aggressive monetary easing next year.
The big test will come at the end of March when the fiscal year ends and banks tend to hold on to cash.
The rupee appreciated by three paise to close at one-week high of 60.81 against the US dollar in the previous session on sustained dollar selling by exporters and capital inflows.
Rajan also said the RBI had reduced the current account deficit "substantially".
India's macroeconomic indicators are improving and inflation has been coming down consistent with the central bank's forecast, but Asia's third-largest economy needs investment growth to pick up, he added.
The rate of price rise in vegetables stood at 15.15 per cent in August as against 16.88 per cent in the previous month.
CPI inflation could fall marginally but stay above RBI's comfort level.
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