The Finance Ministry is planning to introduce a bill in the Budget session to give statutory status to MUDRA Bank which will act as a regulator for micro finance institutions, said the media reports.
In the next phase, through a legislation MUDRA Bank will be set up which will act as a regulator for the micro finance institutions, media reports said.
The existing Pradhan Mantri Micro Units Development and Refinance Agency (MUDRA) Yojana is being executed through NBFC registered with RBI.
The conversion of the present NBFC into the MUDRA Bank would take place through the Bill which may be introduced in the Budget session of Parliament next year, media report added.
The role envisaged for MUDRA Bank include laying down policy guidelines for micro enterprise financing business as well as registration of MFIs, their accreditation and rating.
The present Pradhan Mantri MUDRA Yojana (PMMY) with focus on financing 5.75 crore self-employed provides loans between Rs 50,000-Rs 10 lakh to small entrepreneurs.
It has been introduced for development and refinancing activities relating to micro units. The scheme provides refinance to banks and other institutions at 7 per cent.
During the current fiscal, banks will disburse about Rs 1.22 lakh crore to small business units under PMMY.
The banking sector has been allocated an overall disbursement target of Rs 1,22,188 crore during 2015-16 for MUDRA loans and the banks have already disbursed Rs 15,566 crore as on August 17 to more than 20 lakh borrowers under PMMY.
It has been decided to organise mega credit camps across the country between September 25, and October 2, for PMMY loans so that maximum number of borrowers could get credit as per their requirement under the three categories of loans.
The scheme was launched by Prime Minister Narendra Modi in April.
Three products available under the PMMY are Shishu, Kishor and Tarun to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur.
Shishu covers loans up to Rs 50,000 while Kishor covers above Rs 50,000 and up to Rs 5 lakh. Tarun category provides loans of above Rs 5 lakh and up to Rs 10 lakh.