Micro Units Development and Refinance Agency – MUDRA Bank
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Details about MUDRA Bank:
Type – Subsidiary
Industry – Business finance
Founded – 8 April 2015; 2 years ago
Headquarters – Mumbai
Area served – India
Products – Microfinance and refinance
Website – www.mudra.org.in
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 MSMEs. 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 were 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 (57.6 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 capital of 200 billion (US$3.1 billion) and a credit guarantee fund of 30 billion (US$470 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. However, it will not regulate Micro Finance institutions.
The bank will classify its clients into three categories and the maximum allowed loan sums will be based on the category:
- Shishu: Allowed loans up to 50,000 (US$780)
- Kishore: Allowed loans up to 5 lakh (US$7,800)
- Tarun: Allowed loans up to 10 lakh (US$16,000)
Government has decided to provide an additional fund of 1 trillion (US$16 billion) to the market and will be allocated as,
- 40% to shishu
- 35% to kishor
- 25% to Tarun
Those eligible to borrow from MUDRA bank are,
- Small manufacturing unit
- Fruit and vegetable vendors
The basic criteria of age should be 18 years old. Now, coming to the gist, you can only have a long under the scheme of the Pradhan Mantri Mudra Bank Loan if and only if you are applying it for commercial and business purposes and not for personal purposes. At the most, borrower can buy vehicle from mudra loan, given that it is used for commercial purposes. Lastly, this loan is for new business is and its only applicable for small business owners and obviously, if you have your turnover higher than a bar which is set from before, then you won’t be able to apply.
Micro Units Development and Refinance Agency Limited (MUDRA Bank ) has been set up for ‘funding the unfunded’ micro enterprises in the country. MUDRA will refinance all banks, Micro-finance Institutions (MFIs) and other lending institutions, which are in the business of lending to micro / small business entities, engaged in manufacturing, trading and services activities. Thus, MUDRA Bank will strengthen the Last Mile Financial Institutions by extending refinance and other development support to expand their outreach. This will in turn help micro businesses across the length and breadth of the country. MUDRA’s mandate also includes developing the micro enterprise sector into a viable economic sector, for which various developmental interventions including financial/ business literacy programmes are planned.
PMMY loans will be extended by all Banks such as PSU banks, Regional Rural Banks (RRBs), Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions and Non-Banking Finance Companies.
Any Indian Citizen who has a business plan for income generating micro/small business activity in manufacturing, processing, trading or service sector, and whose credit need is less than 10 lakh can approach a Bank/ MFI for availing of MUDRA loans under PMMY, or can apply online through website of standup India.
The principal objectives of the MUDRA Bank are:
- Regulate the lender and the borrower of microfinance and bring stability to the microfinance system through regulation and inclusive participation.
- Extend finance and credit support to Microfinance Institutions (MFI) and agencies that lend money to small businesses, retailers, self-help groups and individuals.
- Register all MFIs and introduce a system of performance rating and accreditation for the first time. This will help last-mile borrowers of finance to evaluate and approach the MFI that meets their requirement best and whose past record is most satisfactory. This will also introduce an element of competitiveness among the MFIs. The ultimate beneficiary will be the borrower.
- Provide structured guidelines for the borrowers to follow to avoid failure of business or take corrective steps in time. MUDRA Bank will help in laying down guidelines or acceptable procedures to be followed by the lenders to recover money in cases of default.
- Develop the standardised covenants that will form the backbone of the last-mile business in future.
- Offer a Credit Guarantee scheme for providing guarantees to loans being offered to micro businesses.
- Introduce appropriate technologies to assist in the process of efficient lending, borrowing and monitoring of distributed capital.
- Build a suitable framework under the Pradhan Mantri MUDRA Yojana for developing an efficient last-mile credit delivery system to small and micro businesses.
Major Product Offerings
MUDRA Bank has rightly classified the borrowers into three segments:
- The starters,
- The mid-stage finance seekers and
- The next level growth seekers.
Initially, sector-specific schemes will be confined to “Land Transport, Community, Social & Personal Services, Food Product and Textile Product sectors”. Over a period of time, new schemes will be launched to encompass more sectors.
MUDRA Bank operates as a refinancing institution through State/Regional level intermediaries. It refinances NBFCs/MFIs and also banks, primary lending institutions etc.
|30 Days Study Plan for IBPS Clerk Mains 2017|
|Days||Quantitative Aptitude||Current Affairs||Static GK / Banking Awareness||Reasoning||English|
|Day-1||Simplification, Wrong term in Number Series||Sep 1-7||CMs and Governors / About RBI and its Responsibilities||Coding and Decoding||Errors in Articles and Preposition|
|Day-2||Average, Percentage and Partnership||Sep 8-14||Country, Capital and Currency (1sthalf) – HQ of banks and Heads||Relationship||Errors in Nouns and Pronouns|
|Day-3||Ratio and Problems based on Ages||Sep 15-21||Country, Capital and Currency (2ndhalf) – Types of Cheques||Direction Sense||Errors in Conjunction and Tenses|
|Day-4||Time & Work and Pipes & Cistern||Sep 22-30||International Organisations and its HQ – Types of Accounts||Syllogism||Errors in If clauses and Relative Pronoun|
|Day-5||Time & Distance and Problems based on Trains||Oct 1 – 7||National Parks (1st half) – Types of Cards||Input and Output||Errors in Adverb and Adjective|
|Day-6||Simple Interest and Compound Interest||Oct 8 – 14||National Parks (2nd half) – About RRBs||Decision Making||Errors in Active/Passive voice|
|Day-7||Profit and Loss||Oct 15-21||Important Days with themes(2017) / About Payments Banks & NPCI||Course of Action||Errors in Comparison|
|Day-8||Probability and Mixture & Allegation||Oct 22-31||City and Rivers with Origin / About NBFCs and Small Fin Banks||Statements and assumption||Errors in Direct/Indirect speech|
|Day-9||Boats and Streams||Nov 1- 7||Power plants and Dams / About SEBI and IRDAI||Linear Sitting arrangements||Errors in Verbs|
|Day-10||Mensuration||Nov 8-14||Important Lakes and Sanctuaries / About Credit Rating Agencies||Circular Sitting arrangements||Meaning for Idioms and Phrases (1st half)|
|Day-11||Data Interpretation (Table and Pie chart)||Nov 15-21||Dance and Festival / Types of Loans and Negotiable Instruments||Parallel Sitting Arrangements||Meaning for Idioms and Phrases (2nd half)|
|Day-12||Data Interpretation (Bar and Line Graph)||Nov 22 – 30||2011 Census / About IMPS, NEFT, RTGS||Puzzle||Phrase replacement (Vocabulary based)|
|Day-13||Data Interpretation ( Caselet ) and Quadratic Equations||Dec 1-7||Important Temples , Mosque-Church / About UPI and BHIM||Input and Output (New pattern)||Single fillers|
|Day-14||Time & Work (Applied in DI)||Dec 8-14||National and International Stadiums / India’s GDP Prediction||Coding and Decoding (New pattern)||Wording Arrangement within a sentence|
|Day-15||Time & Distance (Applied in DI)||Dec 15-21||Important Universities in India / SARFAESI Act||Direction sense(New pattern)||Sentence Arrangement|
|Day-16||Simple Interest and Compound Interest (Applied in DI)||Dec 22-31||Superlatives (Largest, smallest, etc.) / Basel norms||Blood Relationship (New pattern)||RC based on Economics and Social issues|
|Day-17||Profit and Loss (Applied in DI)||Jan 1-7||Cabinet Ministers and their Constituency / About MUDRA Bank||Data Sufficiency||Double Fillers|