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Mudra Loans Turning Bad
Why is it in the news?
- Reserve Bank of India deputy governor raised red flags over rising non-performing assets (NPAs) in loans disbursed under the government’s Mudra loan scheme.
- The deputy governor also urged banks to monitor the repayment capacity of borrowers before disbursement.
More in the news
- The government had in July informed Parliament that total NPA in the Mudra scheme of over ₹3.21 lakh crore has jumped to 2.68% in FY19 from 2.52% in FY18.
- Since the inception of the scheme, over 19 crore loans have been extended under the scheme up to June 2019.
- MUDRA Yojana:
(1) Pradhan Mantri Mudra Yojana (PMMY) is a scheme initiated by Government of India to provide loans up to Rs. 10 lakh to non-corporate, non-farm small/micro enterprises.
(2) The scheme was flagged off in 2015 by government to ease the credit flow to India’s MSME sector.
(3) Loan amount offered- The scheme has three categories under which loans are disbursed:
(a) Shishu – For loan amount up to Rs. 50,000
(b) Kishor –For loan amount from Rs. 50,001- Rs 5 lakh
(c) Tarun – For loan amount more than 5 lakhs and up to Rs 10 lakh.
Source
The Hindu.