While inflation rises, the Reserve Bank of India will soon come out with major reforms in the banking sector that will allow foreign banks to enter India in a big way and even take over domestic lenders, Governor Dr Raghuram Rajan has said.

"That is going to be a big opening because - one could even contemplate taking over Indian banks, small Indian banks and so on," he told a Washington audience on Sunday.

The policy framework for the entry of foreign banks in India, Dr Rajan added, would be unveiled in the next few weeks.