NPA Under Mudra Scheme Within Limits

While the NPAs or distressed loan account under MOdi government's flagship Mudra scheme are well within the prescribed limits of RBI, there have been reported some banks which have breached the threshold set by the apex bank, a senior finance ministry official said. Early this year, the RBI has raised concerns over mounting NPAs under PMMY that has been envisaged to promote small businesses.

A leading business daily cites an official who suggests that on an overall basis, NPA figure under the scheme is at 5%, which is less than the stipulations made under the Basel norms. But some of the banks have shown deviation from the threshold and that is rather worrisome.

As per other reports, in January, the NPAs under Mudra has surpassed Rs. 11,000 crore. According to the provisional data of the government, the total loan disbursed up to March 22 in FY19 under the Mudra scheme stood at Rs 2,73,748.57 crore, while in FY 18 and FY19, the government had disbursed Rs 175312.13 crore and Rs 132954.73 crore respectively.

Under the scheme loans up to Rs. 10 lakh are offered to promote small enterprises by commercial banks, rural reserve banks or RRBs, small finance banks, cooperative banks, MFIs and non-banking finance companies or NBFCs to the non-corporate, non-farm small and micro enterprises.

Under the scheme, Mudra loan can be granted under three categories - 'Shishu', 'Kishore' and 'Tarun'. While under the category of Shishu, the loan can be extended up to Rs 50,000, under Kishore and Tarun, the loans can be granted up to Rs 5 lakh and Rs 10 lakh respectively. And proprietorship, partnership concern or an individual or any of the public or private company with a satisfactory credit history is eligible to get loan sanctioned under the scheme.

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