Mudra Loans: Govt wants lenders to step up focus on Mudra loans – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/banking/finance/banking/govt-wants-lenders-to-step-up-focus-on-mudra-loans/articleshow/82889995.cms

Synopsis“We are also considering extending the interest subvention of 2% on prompt repayment of Shishu loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY),” said a government official. The scheme ends this month.

The government wants lenders to focus on Mudra loans, as it expects that small borrowers will help pick up credit demand once the lockdowns in states are eased.

“We are also considering extending the interest subvention of 2% on prompt repayment of Shishu loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY),” said a government official. The scheme ends this month.

Govt Wants Lenders to Step Up Focus on Mudra Loans

Last year in June, the government announced the interest subvention under the Atmanirbhar Bharat Abhiyan. It had noted that the move will help support small businesses to continue functioning during these times of crisis and have a positive impact on the economy and support its revival.

Under the PMMY, loans up to `50,000 are termed as Shishu loans. The subvention scheme is being implemented through the Small Industries Development Bank of India.

“We have asked banks to prioritise this segment and ensure timely sanctions and disbursals,” said the official, adding that banks have been asked to regularly monitor asset quality for small-ticket loans including PMMY loans.

In fiscal 2021, banks had sanctioned loans worth `2.79 lakh crore under the PMMY. Of these, loans of `2.64 lakh crore were disbursed.

Earlier this month, as part of its Covid-relief measures, the Reserve Bank of India had allowed banks to restructure loans of individuals, small businesses and MSMEs having aggregate exposure of up to `25 crore and who have not availed of restructuring under any of the earlier restructuring frameworks.

“Banks are already taking steps to improve underwriting standards and maintain regular and intensive contacts with PMMY borrowers,” said the official.

Share the joy of reading! Gift this story to your friends & peers with a personalized message. Gift Now

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s