Pradhan Mantri Mudra Yojana (PMMY)
Micro Units Development and Refinance Agncy (Mudra) Bank-
- MUDRA Bank was launched by Prime Minister Narendra Modi on 8th April, 2015 with a corpus of Rs.20,000 crore and a credit guarantee corpus of Rs.3,000 crore to promote entrepreneurship in India by funding the non-corporate small business sector.
- MUDRA Bank, as it is not a full-fledged bank, in its refinancing scheme, is going to provide loan through NBFCs, MFIs, Rural Banks, Nationalized Banks, Private Banks, Primary lending Institutions and other intermediaries.
All Scheduled Commercial Banks in public private sector having, three years of continuous profit track record, net NPA not exceeding 3 per cent, minimum net worth of Rs100 crore and not less than 9 per cent CRAR are eligible to give loan under PMMY.
For Regional Rural Banks (RRBs)
All restructured RRBs with net NPA under 3 percent (can be relaxed in deserving cases), having profitable operations and not carrying any accumulated losses and not less than 9 percent CRAR are eligible to give any loan under PMMY. MFIs and Small Business Companies can also take part if they fulfill requirements.
Three categories of MUDRA Bank Scheme
In order to signify the growth state, Development and Funding the small business or micro units have been classified into three categories: Shishu Category, Kishore Category and Tarun Category.
- Shishu : covering loans upto 50,000/-
- Kishor : covering loans above 50,000/- and upto 5 lakh
- Tarun : covering loans above 5 lakh and upto 10 lakh
Difference between MUDRA Bank and SIDBI-
- SIDBI is an apex small units development banks where MUDRA will initially be started as a department of SIDBI.
- The role of SIDBI remains to promote and finance the small scale sector, implement government plans and coordinate with other organizations while the role of MUDRA has been conceived more in the context of present state of Microfinance sector.
- SIDBI is a development financial institution with multiple functions for the MSMEs (Micro, Small and Medium Enterprises) including financing and development responsibilities. It was established in 1990 it has become the principal financial institution for the promotion, financing and development of MSMEs. SIDBI gives refinancing as well as direct financing support to firms. Previously, it was the SIBDI that provided indirect loans to small units.
- The MUDRA aims to give loans below Rs 10 lakh. Micro units are the domain of MUDRA. Under the existing arrangement, SIDBI gives loans for higher amounts. Hence, MUDRA is established as a subsidiary of SIDBI.
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