The recently approved tie-up between State Bank of India and Adani Capital, a non-banking financial company (NBFC) for the purpose of jointly venturing into financing farmers to purchase tractors and other farm implements has met with a volley of protests from prominent citizen activist groups and members of the farming community.

The protest groups expressed their anguish that the banking regulator, Reserve Bank of India (RBI) has facilitated this joint venture by means of a notification. They expressed the sentiment that the RBI should have done its due diligence by conducting an elaborate round of consultations with all the stakeholders before taking such a decision.

The protestors pointed out that this could be a move that aims at bringing the small borrowers that will include a huge chunk of farming community members directly under the grasp of corporate business houses. Citing the recent repeal of farm laws by the Centre, the protestors voiced the sentiment that the government is now attempting a backdoor entry for the big corporate houses into wrestling power over the farming community.

They also pointed out that the outreach and capacity of such private NBFCs are far restricted and serve the sole purpose of maximizing their profits. This adversely affects many small borrowers from the farming as well as MSME community who seek micro-financing to achieve financial self-reliance.

Citing how things turned bad way back in the early nineties, when private promoters were permitted to enter the banking sector, the protestors expressed angst. It eventually resulted in the public sector banks being forced to take over these institutions in order to save the depositors’ savings pool.

The protestors expressed the apprehension that it might well turn out to be a “history repeat.” They also recalled a distress situation in which thousands of borrowers from the micro-finance category were driven to suicide owing to mismanagement of funds.

SBI-Adani tie up harmful to small farmers
Private NBFCs only seek maximizing profits
Small borrowers’ interests get compromised
It’s highly unsafe to rely on private promoters
RBI needs to seriously do a rethink on this
Farmers see red on Adani-SBI alliance
Micro finance to suffer from Adani-SBI tie-up
Protest group asks RBI to reconsider move
Crisis situation might result in farmer suicides
An unwise move that will affect MSME borrowers