IBA suggests bond issue for infrastructure lending
31 Dec 2009
The Indian Banks Association (IBA) has approached the government and the Reserve Bank to allow banks to issue five-year senior bonds for infrastructure lending. It has also called for CRR, SLR exemptions for infrastructure bonds.
News agency reports quoted IBA chief executive K Ramakrishnan as saying that the issue of bonds with maturity of five years would make infrastructure financing easier for the banks.
IBA further proposed that in view of the scarcity of adequate funding in the infrastructure segment, the central bank should also consider providing SLR and CRR exemptions to infrastructure bonds floated by banks.
The industry lobby has in its written representation also requested policy makers for exemption of the infrastructure bonds issued by banks from capital gains 54EA and investments u/s 88 if the IT Act according to Ramakrishnan.
Under the 11th plan, the government has targeted an investment of $5,000 billion in infrastructure.
On the migration to International Financial Reporting Standards (IFRS), he said it was virtually impossible to migrate to the new accounting standard without adequate technology, expertise and necessary infrastructure.
IBA was also working on combining the UID project with the financial inclusion project of the banks for the benefit of both banks and the project, he added.
For the UID Project, the Unique Identification Numbers can be allotted to individuals with the help of banks and in the process banks would be ale to open as many accounts as possible for the persons allotted the Unique Identification Numbers, Ramakrishnan said.