I have a feeling it wont be long util someone comes up with the correct answer!
For the dedication towards and difficulty of the task of finding out which city I have on my mind, I up the reward.

The new loot will be:
2 credits 
Another hint to get you there!
in medieval times, this was a centre for philosophy and learning in its country
it is by a river
founded after 1000 AD
it served as the old capital of a certain dynasty
the weather is really pleasant, with moderate summer and winter. Massive rainfall mainly from June to September
the population is over 150000 but less than 200000
the two important figures/Saints are performing a religious dance portraying a story, in the city that we are looking for

Religion wise it is composed of ca. 99% Hinduism and ca. 1% Islam; a great Saint of a specific sect has been born here and thus this is also a place of pilgrimage
Where am I?