Why a Larger Spotlight is
Needed on Co-Lending Deals Between Banks and NBFCs
The relationship that PSU
banks establish with NBFCs run by big corporate groups need to be watched very
carefully due to potential moral hazard problems.
Why a Larger Spotlight is
Needed on Co-Lending Deals Between Banks and NBFCs
A man checks his mobile
phones in front of State Bank of India (SBI) branch in Kolkata, February 9,
2018. Photo: Reuters/Rupak De Chowdhuri/Files
Thomas Franco
BANKING
09/DEC/2021
The Reserve Bank of India’s
push for co-lending arrangements between banks and non-banking financial
companies was brought back into the spotlight this week when State Bank of
India announced that it had entered into a tie-up with the Adani Group for the
very same.
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Take a second to consider
what the detail entails. SBI — the largest lender in the country with a
customer base of 45.92 crores, a branch network of 22,219 branches, and
2,45,652 employees — has entered into a deal with Adani Capital, which has just
63 branches in 6 states with 758 staff.
This partnership — which the
accompanying press release says is being done for increasing lending to the
farm sector — has drawn criticism from Opposition party politicians.
Former Kerala finance
minister Thomas Isaac for instance slammed the Centre over the agreement
between the State Bank of India and Adani Capital for co-lending to farmers,
saying it will benefit the private firm more by allowing it to piggyback a
public sector behemoth with extensive reach and expertise.
As per the press release of
SBI dated December 2, 2021, the public
sector has signed a master agreement with Adani Capital Private Ltd, the NBFC
arm of Adani Group, for co-lending to farmers for purchase of tractors and farm
implements, to increase efficiency in farm operations and productivity of
crops. SBI is actively looking at
co-lending opportunities with multiple NBFCs for financing farm mechanisation,
warehouse receipt finance, farmer producer organisations etc for enhancing
credit flow to double the farmers income, stated the press release.
The question, as Isaac has
raised, is why SBI has to get into an agreement with such a small company when
SBI already has 22,219 branches? SBI already has 1.37 crore farmers credit
accounts and an outstanding farm credit of Rs 1,96,268 crore. It has supply chain credit with 28,000
dealers, 14,000 vendors and various companies. SBI also has 71,968 business
correspondents outlets as of March 21.
Adani capital started its
operations only in 2017. It has a
capital of just Rs 20 crores. It has only 63 branches with 738 employees in 6
states namely Maharashtra, Gujarat, Rajasthan, Karnataka, Uttar Pradesh and
Tamil Nadu. It has just 28,000 customers with a loan outstanding of Rs. 1292
crores and a gross NPA of 1.38% already.
It has a loan limit of Rs.1476 crores from SBI, PNB, Indian, Canara,
PSB, Union, Central Bank, BOI, SCB, DBS, ICICI, Axis, IDFC, Yes Bank, Karnataka
Bank, Federal Bank, HDFC and NABKISSAN.
In no way Adani Capital is
going to help SBI to increase farm credit. But it can use the name and
infrastructure of SBI to approach farmers.
What is the alternative?
Definitely the reach of SBI
to the farmers is not adequate. So SBI can easily convert all the 71,638
business correspondent outlets into micro small branches and triple the farm
credit in a short term.
RBI which has been opposed
to corporates getting into banking has permitted the same corporates to get
into Banking, hitch cocking Public Sector banks through Payment Banks and Non-Banking
Financial companies. The NBFCs will be charging much higher interest rates and
service charges. Can this be allowed by RBI?
Similarly a review of Jio
Payment Bank is urgently needed. In 2017, SBI had somewhat a similar agreement
in 2017 with Mukesh Ambani’s Reliance by joining as junior partner in Jio
Payment Bank with 30% shareholding. That
time SBI claimed that this will pave way to reach larger number of customers
who are Jio users. In 2018 SBI entered an agreement with Reliance Jio and
stated that it will provide video banking facility and Jio will have
partnership in the Yono, the digital transaction platform of SBI. The reality is SBI has not achieved anything
great out of this deal.
The SBI annual report
2020-21 has an annexure which shows that Jio Payment Bank has not made any
headway. After 4 years its deposits are just Rs 17.39 crores, borrowings
Rs.9.74 crores and interest earned Rs.9.70 crore.
The employees and the trade
unions have to oppose the Adani deal on its merits and refuse to lend to
farmers through Adani Capital. Instead
they should give direct loans. They
already have tie ups with tractor dealers.
They should not be a party to the modern day money lender Adani using
the banks’ money to have control over farmers.
Immediate investigations are
needed at different levels. Who is influencing these decisions? How safe is
SBI?
Though both SBI and Adani
Capital can claim that their tie up is aimed at expanding rural and farm credit
the RBI as a regulator must keep a watch on how big corporate group owned NBFCs
leverage bank funds. True, many big corporate houses have promoted NBFCs and
they access bank funds for on lending. But recent experience has shown that the
boards of NBFCs run by big business houses have had to be taken over by the RBI
because of non repayment of bank debt and other moral hazard issues. For
instance, the board of one of the biggest NBFCs Reliance Capital has been
superseded by RBI as it has failed to repay debt of banks and financial
institutions and allegedly lent to own group firms. So, the relationship PSU
banks establish with NBFCs run by big corporate groups need to be watched very
carefully due to potential moral hazard problems.
These are risks which the
regulator must keep in mind when public
sector banks establish special relationships with NBFCs run by big corporate
groups.
Thomas Franco is Joint
Convener, People First and Former President, All India State bank Officers
Federation.
SBI కు అదానీ క్యాపిటల్ కు
రైతులకు రుణాలు మంజూరు చేయడానికి
Co - lending అగ్రిమెంట్
జరిగింది
SBI గురించి ఓ సారి తెలుసుకుందాం
22000 బ్రాంచ్ లు
60,000 ఏటీఎమ్ లు
48,00,000 కోట్ల రూపాయలు
ఆస్తులు ....
1,40,00,000 రైతు ఖాతాలు..
రైతులకు ఇచ్చిన రుణాలు
2,00,000 కోట్ల రూపాయలు
అదానీ క్యాపిటల్ గురించి
కూడా ఓసారి తెలుసుకుందా...
60 బ్రాంచ్ లు
13000 కోట్ల రూపాయలు ఆస్తులు
28000 రైతు ఖాతాలు
రైతులకు ఇచ్చిన రుణాలు
1300 కోట్ల రూపాయలు
ఈ co lending అగ్రిమెంట్
ఎలా అంటే...
రైతులకు ఇచ్చే రుణాలు లో
80 శాతం SBI పెట్టుబడి పెడుతుంది...
20 శాతం అదానీ క్యాపిటల్
పెట్టుబడి పెడుతుంది...
పెట్టుబడి మాత్రమే SBI వారిది
రుణాలు ఇవ్వడం
రైతులు ఎంపిక అంతా
అదానీ క్యాపిటల్ చేస్తాదట...
డబ్బు SBI ఇస్తుంటే
రైతులకు అప్పు మాత్రం
అదానీ ఇస్తాడు....
లాభాలు మాత్రం
సగం సగం ...
ప్రపంచం మొత్తం మీద ఇటువంటి
అగ్రిమెంట్ ఎక్కడైనా జరగడం
ఎవరైనా చూసారా...???
కొంతకాలానికి అదానీ క్యాపిటల్
బ్రాంచ్ లు విస్తరించాలి... ఎస్బిఐ బ్రాంచ్ లు తగ్గిపోవాలి......
కస్టమర్లు అందరూ అదానీ క్యాపిటల్
కు మారిపోవాలి... ఎస్బిఐ మూసేయాలి...
దేశాన్ని బ్యాంకింగ్ రంగాన్ని
వ్యవసాయ రంగాన్ని నాశనం చేస్తున్న
దుర్మార్గులు ఎవరో ఇప్పటికయినా
అర్థం అయితే తరిమి కొట్టండి....
లేకపోతే మన తరువాత తరం వాళ్ళు వడ్డీలు కట్టలేక
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