BANK officers’ union AIBOC on Thursday underscored the need for expanding financial inclusion and focus on meeting credit needs of small borrowers. There are reports of farmers’ suicides from different parts of the country,afallout of exorbitantinterestrate chargedby the NBFCs/money lenders, along with unremunerative farm product prices, All India Bank Officers’ Confederation (AIBOC) said in a statement on the eve of Bank Nationalisation Day. There isaneedforexpandingrural presence of banking sector so that the poor farmers don't fall prey to NBFC and money lenders, it said. As per recent reports, only about 74,000 villageshave access to banking services, it said. Access to credit forthe rural poor in India remains a significant challenge, AIBOC General Secretary Rupam Roy said. Theprioritisationofbigger clients by larger banks post-merger leads to reduced access to bank credit for smaller businesses, driving them towards NBFCs, he said.

 

The higher interest rates and potential for exploitative practices in the NBFC sector put significant financial strain on SMEs, limiting their growth and sustainability, he added. The statement further said privatisationofnationalisedbanksand the trend towards consolidation under larger banking entities are not solutions to the underlying problems inthefinanciallandscape. Privatisationshifts the focus from social and financial inclusion to profit maximisation, leading to increased economic inequality, it further said. Ina bidtowardsprivatisation,the Government changed their strategy and merged public sector banks (PSBs),bringing theirnumber down to 12, it said, adding that this is a form of backdoor privatisation. These steps were taken disregardingthat thePSBs lifted theeconomy out of recession both during the global meltdown of 2008 and 2020 Covid pandemic, it said. One of the most immediate consequences ofPSBmergershasbeen the erosion of their market share, it claimed. Without increasing their efficiency, the share of PSBs in total deposits has decreased from 66 per cent at the end of 2017-18 to 59 per cent in December 2023, it said.