New Delhi: PrimeMinister Manmohan Singh has promised to sympathetically consider the demand ofsome cooperative banks for removal of the 33 per cent income tax on their profits,a measure that was imposed in the current year's budget.

He gave this assurance to a delegation of representatives of nine cooperativebanks from Karnataka which met him here last night. The delegation was led byCPI(M) MP Basudeb Acharia.

The delegation brought to his notice that the tax exemption enjoyed by thecooperative banks was withdrawn in the current year's budget which they saidhit hard at the foundations of the cooperative sector that catered mainly tothe needs of the poor, middle and the salaried class and other marginalisedsections.

The representatives of the small banks told Singh that it was wrong to equatethe cooperative sector with the huge commercial banks that made profits incrores of rupees every year, thus providing no no level playing field.

They said the rationale given by Finance Minister P Chidambaram that the tax onprofits would bring about discipline in their audited and filing of tax returnswould improve the standards of accountability and governance did not not holdany water because these banks already functioned under the strict RBI norms andthe government audit through Registrar of Cooperative Societies.