The surge in the rupee value and excess inflows were the main challenges to the Indian economy, said K V Kamath, managing director and chief executive officer, ICICI Bank.
Kamath added, "These steps are in the right direction. However, the inflows continue to be strong. The rupee rise is getting to be a challenge and all tools in the monetary policy context have to be used.''
"Investors continue to believe in the long-term growth story of India. India will continue to see sustained GDP growth of around 10 per cent for the next 10 to 15 years. We have come through various challenges such as inflation and overheating. A slowdown is visible in certain sectors and a more vivid picture could be obtained only after seeing the financial results of corporates in the second quarter,'' added Kamath.
The Securities and Exchange Board of India had released a discussion paper, in which it had sought comments by October 20 on various proposals, including not to allow foreign institutional investors and their agents from issuing or renewing offshore derivative instruments such as participatory notes, equity-linked notes and capped-return notes.
NEWSWIRE18 adds: The capital flows into India were a combination of several factors such as strong corporate profitability and robust remittance flows, said Kamath.
"The white- and blue-collar workers are remitting money back home. So that money is now $30 billion a year and growing at 30 per cent. So it is not truly interest-rate sensitive but India-sensitive. The India story is what is getting this money back. Exports are getting competitive," he said.
India's gross domestic product growth was seen at 10 per cent on a sustained basis in the next 10-15 years, he said.
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