The largest lender of the country, ICICI Bank is emphasizing on Government allowing tax free infrastructure bonds. CEO and MD of the bank, Ms Chanda Kochhar said that such bonds would act as a cost effective source of funding banks for banks and also help in increasing infrastructure related activities.
She also said that infrastructure funding if considered in priority sector lending class would benefit in making a lot of funds being available for infrastructure projects.
Currently, infrastructure financing by banks are not covered under priority sector classification.
"With nation's priority being infrastructure, this kind of funding should qualify as priority sector...," she noted.
She also suggested that banks should be given permission to provide guarantees for external commercial borrowing loans. "There are many of foreign lenders that do not want to take a direct risk on infra projects in India", she said.