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"Projects with clear revenue streams should be developed; then banks will be interested in funding them. Ratings of these bodies will also bring in great comfort to banks,'' Mr Nachiket Mor, Executive Director, said.

Mumbai , Sept. 18

ICICI Bank is ready to lend to urban local bodies provided there are viable projects with defined revenue streams.

"Funds are no longer a problem,'' said Mr K.V. Kamath, MD & CEO. "Banks have adequate funds and interest rates are their lowest ever.''

Urban local bodies need to make use of the situation and come forward with projects. However, they need to become more transparent and develop automated accounting systems.

Urging urban local bodies to access more funds, Mr Kamath said, "Out of the total bank credit, a mere 0.5 per cent is availed of by urban local bodies. In the US there is a $1.7-trillion municipal bond market.''

In India, only the local bodies of Ahmedabad and Hyderabad have rated themselves and accessed the market for funds, while Pune and Mumbai are known to be mulling the proposal.

"Projects with clear revenue streams should be developed; then banks will be interested in funding them. Ratings of these bodies will also bring in great comfort to banks,'' Mr Nachiket Mor, Executive Director, said.

The bank has disbursed just below Rs 100 crore to municipal bodies but is keen on funding projects in areas such as transportation, sanitation, solid waste management and urban micro-finance. It is also keen on restructuring of these bodies by reduction in interest costs.

There is a need for dramatic change in urban areas as 30 per cent of India's population now resides in urban areas and this is only expected to increase with industrialisation. Mr Kamath was speaking at an awards ceremony for municipal bodies held by Crisil Infrastructure Advisory for excellence in specific areas of work in an attempt to encourage public bodies.

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