Rinse the rice until the water runs clear.
Put the rice in a medium saucepan with the water, cinnamon sticks, cloves, bay leaves, turmeric, and 1 teaspoon of the salt.
Bring to a boil, reduce the heat to low, and cook, covered, for 15 minutes.
Remove from the heat and let sit, without removing the lid, for 10 minutes.
In a small frying pan, melt the butter with 2 tablespoons of the oil over moderately high heat.
Add the mustard seeds and cook, stirring, until they begin to pop, about 30 seconds.
Add the cashews; cook, stirring, for 30 seconds longer.
Gently stir the cashew mixture into the rice with a fork.