RBI chief Raghuram Rajan said Asia's third-largest economy is being hampered by a drop in public and private investments.
Jaitley said a draft of India's bankruptcy law was almost ready.
Chinese brokers had been looking to use some of the cash they raised this year to expand their global reach
It hopes to attract billions of dollars in investment by this move, and may ease some restrictions on foreign inflows.
The RBI recently met with a handful of foreign banks and asked them to stop acting as market-makers for rupee NDFs, according to three bankers involved in the discussions.