Banking sector seeks hike in tax exemption limit for savings

India's banking sector on Tuesday sought increasing the tax exemption limit for savings to Rs.2.5 lakhs and allowing it to issue off-shore rupee bonds to finance infrastructure, at a pre-Budget meeting Finance Minister Arun Jaitley had with banks and financial institutions.

"Other suggestions include listing of non-life insurance public sector undertakings while retaining majority government control and broad-based FDI (foreign direct investment) in agriculture sector," a finance ministry release here said.

The delegation also recommended digitization of land records to compensate farmers quickly, and direct distribution of fertilizer subsidies to farmers through the Direct Benefit Transfer (DBT) scheme so that savings on this account could be used for increasing public capex spending, it added.

"Other suggestions included interest rate of small savings schemes be rationalized and fixed at a five year government security yields," the ministry said.

Industry representatives who attended the meeting included Reserve Bank of India Deputy Governor Urjit Patel, State Bank of India chairperson Arundhatti Bhatacharya, Bank of Baroda executive director B.B.Joshi, Janaagraha's Bharath Sondur, LIC chairman S.K Roy, IIFCL chairman S.B.Nayar, IDBI Bank chairman Kishore Kharat, Axis Bank chief executive Shikha Sharma, and Citibank chief executive Pramit Jhaveri.