To help the banking sector meet the requirement of the fast-growing economy, the Confederation of Indian Industry has stressed on more fiscal reforms in the forthcoming Union budget.
The chamber has demanded exemption for the banks from collection of TDS as they face an inconvenience in the form of collecting TDS certificates.
Given the huge requirements of funds for investments in the economy, banks are increasingly relying on borrowings from foreign sources to complement the resources raised internally. Therefore, the chamber has stressed on the need to make the external commercial borrowings cheaper by allowing tax exemption on payment of interest on external commercial borrowings.
To give a boost to the housing sector financing, the exemption available to housing finance companies for procuring funds through external commercial borrowings should be reintroduced.
The chamber also says that banks should be encouraged to participate in derivative trading to help them have a more balanced mix of assets.