Banks seek mandate for issuing tax-free infrastructure bonds

Banks have sought the mandate for issuing tax-free infrastructure bonds, even as bankers highlighted the requirement for special incentives for investors to invest in infrastructure bonds.

Infrastructure should be taken as a priority sector and there should be an independent regulator for infrastructure. There is also a need to clarify and broaden the definition of infrastructure, participant banks at a pre-budget meeting with finance minister Pranab Mukherjee said.

''A single window clearance for the infrastructure sector projects, including power projects, would go a long way in attracting huge investment in this sector,'' it was pointed out.

They also suggested rationalisation of transaction charges in the secondary market and a boost to microfinance institutions.

Regarding financial inclusion, incentives should be given to banks that have done well in this regard in order to make take them to the second level of economic inclusion, it was suggested.

Participants focused on the need to encourage agriculture lending, SME lending and highlighted the issues of rural warehousing, food inflation etc.