MUDRA Banks
Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public sector financial institution in India. It provides loans at low rates to micro finance institutions and non-banking financial institutions which then provide credit to MSME’s. It was launched by Prime Minister Narendra Modi on 8 April 2015.
The formation of the agency was initially announced in the 2015 Union budget of India in February 2015. It was formally launched on 8 April.
The MUDRA banks will be set up under the Pradhan Mantri MUDRA Yojana scheme. It will provide its services to small entrepreneurs outside the service area of regular banks, by using last mile agents. About 5.77 crore (57.7 million) small business have been identified as target clients using the NSSO survey of 2013. Only 4% of these businesses get finance from regular banks. The bank will also ensure that its clients do not fall into indebtedness and will lend responsibly.
The bank will have an initial corpus of ₹20000 crore (US$3.0 billion) and a credit guarantee fund of ₹3000 crore (US$450 million). The bank will initially function as a non-banking financial company and a subsidiary of the Small Industries Development Bank of India (SIDBI). Later, it will be made into a separate company. It will also serve as a regulator for other micro-finance institutions (MFIs) and provide them refinancing services. It will provide guidelines for MFIs and give them ratings.
MUDRA Bank will have two type of product like refinance for the micro units haveing loan requirement from Rs 50 thousands to 10 lakhs and support of Micro Finance Institutions (MFI) for on landing. MUDRA will refinance to micro business under the scheme of Pradhan Mantri MUDRA Yojana.
Under the guideline of Pradhan Mantri MUDRA Scheme, MUDRA Bank has launched its three initiative product and its name is SHISHU, KISHOR & TARUN to signify the stage of growth and funding needs of the micro units or entrepreneur.
MUDRA Bank is refinancing through State level institutions, MUDRA will deliver the loan through NBFCs, MFIs, Rural Banks, District Banks, Nationalize Banks, Private Banks, Primary Lending Institutions and other intermediaries.
There is no fix Interest rate in MUDRA loan. According to source banks are charging around Base Rate + 1% to 7% minimum. The interest rate can be higher according to risk and customer profile and it can be different in all banks.
There is no subsidy for the loan given under PMMY. However, if the loan proposal is linked some Government schemes, wherein the Government is providing capital subsidy, it will be eligible under PMMY also.
The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The Interest rates are as per the RBI guidelines issued in this regard from time to time.
Eligible to borrow from MUDRA bank are
Small manufacturing unit
Shopkeepers
Fruits / Vegetable vendors
Artisans
CEO of MUDRA BANK is Mr.JIJI MAMMEN
