Bengaluru, 18 September 2025: The All India Federation of Borrowers and Farmers (AIFBF) has warned that India’s 75 crore borrowers are “bleeding silently” due to a toxic combination of exorbitant interest rates and misuse of legal provisions by financial institutions.
Speaking at a press conference held at Legislators’ Home Building, Bengaluru, the Federation called for urgent reforms to protect farmers, students, transporters, MSMEs, and entrepreneurs who form the backbone of the economy.
Mr Dayananda, Former MLC and Chairman & MD of AIFBF, said India’s interest rates are 400–600% higher than competing nations, making credit unsustainable for small and medium businesses. “At such rates, no borrower can survive, let alone thrive. Borrowers are being stripped of dignity and hope, while banks reap record profits,” he said.
The Federation also condemned the misuse of laws under the Insolvency and Bankruptcy Code (IBC) and the arbitrary declaration of NPAs within 90 days, which have forced many viable companies into premature liquidation.
In many cases, assets are being sold at throwaway prices, destroying years of entrepreneurial effort.
AIFBF highlighted that coercive legal measures—ranging from multiple recovery proceedings in DRT, NCLT, and civil/criminal courts to the misuse of investigative agencies—are pushing borrowers into distress rather than offering resolution. This cycle, the Federation warned, is not only ruining individual lives but also weakening India’s economic stability.
Key Reforms Urged by AIFBF
* Rationalise lending rates to global benchmarks.
Provide borrowers six months’ relief before liquidation or asset sale.
* Ensure independent appointment of IRPs/RPs by NCLT, not banks.
* Release collateral and guarantees up to ₹10 crores under CGTMSE.
* End the practice of forced cross-selling of insurance products by banks.
* Grant borrowers voting rights in IBC proceedings.
“Borrowers are not asking for charity; they are asking for fairness. Unless these issues are addressed, the dream of a USD 5 trillion economy will remain just that—a dream,” Shri Dayananda said.
The Federation concluded with a call for borrower-centric policy reforms that restore trust, protect livelihoods, and strengthen India’s economic foundations.
