RBI Deputy Governor Warns About Rising Bad Loans Under Mudra Loan Scheme, Union Cabinet Extends Term of 15th Finance Commission

RBI Deputy Governor warns about rising bad loans under Mudra loan scheme. Union Cabinet extends term of 15th Finance Commission.

 

POLICY

RBI Deputy Governor warns about rising bad loans under Mudra loan scheme.

The Loan Ranger: RBI Deputy Governor MK Jain has warned bankers about the growing stress in Mudra loans.

 

Pradhan Mantri Mudra Yojana (PMMY) is a government programme that provides loans up to INR10L to SMEs. As of March 2019, total disbursements under this scheme were INR311,811cr.

 

Gross NPAs under Mudra rose by 68.7% to INR16,480.87cr in the FY ending March 2019 from INR9,769cr a year ago.

 

While such a massive push would have lifted many beneficiaries out of poverty, there has been some concerns at the growing level of non-performing assets among these borrowers,” Jain said. He added that banks need to focus on the repayment capacity at the appraisal stage itself and monitor loans through the life cycle of the account much more closely.

 

In July, the government had said that total NPA ratio in the Mudra scheme was at at 2.68% in 2018-19, up 2.52%Y-o-Y. Indian Express

Union Cabinet extends term of 15th Finance Commission.

2020 Vision: The Union Cabinet has approved the extension (for the second time) of the term of the 15th Finance Commission to submit its report. The 30 November 2019 deadline has been pushed to 30 October 2020. More details here.

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