public sector banks
17:37
Showing posts with label PMMY. Show all posts
Showing posts with label PMMY. Show all posts
Thursday, 10 August 2017
Tuesday, 20 October 2015
PMMY
21:30
Mudra Bank may miss loans target amid weak demand
Mudra Bank may miss loans target amid weak demand
MUMBAI: Micro Units Development & Refinance Agency (MUDRA) Bank, has managed to sanction just about 30% of its annual target in the first half of the fiscal as the demand for loans remains muted, raising doubts whether the government's ambitious target of Rs 1.22 lakh crore could be achieved.
The absence of suitable products from the banks themselves could be a hindrance to achieving the target as refinance also is on the slow lane, said an official from the bank.
"I agree that credit has been growing at a slow pace, but only 5% of the MUDRA segment has access to formal credit,'' Jiji Mammen, MD & CEO, MUDRA Ltd. told ET in an interview. "Even if we don't manage to reach the Rs 1.22 lakh crore target there would be a significant growth over the previous year."
In the first 6 months of the current year, banks have sanctioned nearly Rs 38,000 crore to over 60 lakh entrepreneurs, Mammen said.
MUDRA was established as a subsidiary of the Small Industries Development Bank of India ( SIDBI) by Prime Minister Narendra Modi in April this year. The agency was set up with an initial corpus of Rs 5,000 crore to provide capital to all banks seeking refinancing of small business loans under Pradhan Mantri Mudra Yojna.
The special effort of the government was to take care of the most jobs creating small and medium enterprises which were getting squeezed due to collapse in trade credit since big companies were delaying payments, or were not providing enough time for small firms to pay up.
In the first six months MUDRA has sanctioned Rs 1000 crore under the refinancing scheme and tied up additional Rs 600 crore with a few banks last month.
"There is a long way to go for the refinancing scheme to pick up. Refinance has been slow as banks don't have products which provides lending at base rates, we are working towards increasing refinancing." Mammen said.
Of the planned disbursement of Rs 1.22 lakh crore, the public sector banks would disburse Rs 70000 crore, followed by Rs 30000 crore by private banks and Rs 22000 crore by Regional Rural Banks.
State-run banks have so far disbursed Rs 17488 crore, which is only one third of the projected target. Private Banks have been lagging as well and have managed to disburse a total of Rs 8613 crore under this scheme so far.
Thursday, 8 October 2015
PMMY
06:33
State Bank Of India insists on Aadhaar for loan under Mudra
State Bank Of India insists on Aadhaar for loan under Mudra
Despite the Supreme Court reiterating that Aadhaar cannot be made mandatory, a nationalized bank is insisting that small entrepreneurs seeking assistance under the Pradhan Mantri Mudra Yojana produce Aadhaar card.
AM Muthillath, 36, a resident of Vidyaranyapura and owner of a garment unit, recently applied to the State Bank of India's Jalahalli %East branch for assistance under Mudra (Micro Units Development and Refinance Agency) scheme. However, his application was rejected as he did not have an Aadhaar card. This despite his having other recognized identity and address- proof documents.
He had applied for Rs 50,000 loan at 1% interest under the scheme.
Muthillath, who also runs an NGO, Sarvajana Bharat, said, "When the government and the judiciary clearly say procuring Aadhaar number is optional, why is the bank making it mandatory? Isn't it a violation of the SC ruling?" When contacted, Rajni Mishra, chief general manager of SBI-Bengaluru circle, said they are only following the rules set by the Union government. "Those seeking assistance under Mudra scheme need to have an Aadhaar number and that's mandatory," she said.
Somashekar VK, managing trustee of Grahak Shakti, a consumer's right forum, terms the SBI decision a blunder. "Linking Aadhaar to public services is not mandatory yet. The government continues to violate the Supreme Court ruling on the same. People who are told can get a written statement from the bank and seek relief in the court of law. We are willing take up the matter forward," he pointed out.
Source:BankingUpdates.
Tuesday, 29 September 2015
Target oriented
08:05
Microlending:Pradhan Mantri Mudra Yojana (PMMY)
No doubt, India’s small entrepreneurs and start-ups need urgent financial assistance. But by putting banks on a mission mode to fulfil this target in a short period, the government is piling up pressure on them and it can lead to serious credit assessment problems.
There is also a danger of the actual needy customer being ignored in the process and funds being misdirected to the wrong beneficiaries. In six months, commercial banks do not have the time to lend to put in place the systems and process to deal with such loans. Banks will, thus, be forced to randomly push money, which can add to their existing pile of non-performing assets (NPAs).
Remember, micro and small borrowers already constitute a substantial portion of banks’ bad loans.
“These (the target customers) are the most vulnerable segment and banks have already seen significant stress from this category,” said Naresh Malhotra, former deputy general manager of State Bank of India. “If you force credit down their throat, you can get into serious mess,” he said.s
Small loans have a credit guarantee cover offered under the CGTMSE scheme. But according to Malhotra, this cover has been reduced and there is uncertainty on how banks will be compensated in case of defaults. Also, under the current plan, the proposed MUDRA Bank will act as a refinancing agency to banks for lending to micro and small businesses. But, in the initial phase, banks themselves will have to manage funds.
Presently, banks have an exposure of Rs 3.7 lakh crore to micro and small sized industries. Many banks like SBI had reduced their exposure to such companies in the recent years on account of severe repayment stress from these companies. In the event of an economic downturn, micro and small firms takes the first hit. State-run banks are already hit with Rs 300,000 crore bad loans on their books and a much larger chunk of restructured loans.
These lenders are grappling with the problems of stressed assets and capital availability. Although the government has promised Rs 70,000 crore infusion over next four years, most experts feel that this wouldn’t be sufficient for banks to meet their requirements arising out of Basel III and provisioning for bad loans.
There are two ways the government could have rolled out the scheme in a better way:
For one, give this job to microfinance institutions (MFIs) and small finance banks. These institutions are the ideal candidates to take up the job of funding micro-borrowers since they have the infrastructure and expertise to cater to this segment. Typically, micro and small borrowers wouldn’t have sufficient collateral to mark against the loans. In the event of default, large banks would find themselves in a difficult position since they lack the infrastructure.
On the other hand, traditionally, MFIs are engaged in the business of dealing with low-income segment and understands the nuances of this business. Even the proposed set of new banks would have been ideally placed to take up this job since most of them have their background in the microlending business.
Second, the government should have given adequate time to these lenders to put in place the infrastructure and let them identify the target customers following the necessary credit appraisal process. It doesn’t make any sense to put bankers at gun point and ask them to finish the job in six months, especially given the fact that banks have already burned their hands by lending to this segment.
A big part of the bad loan problems currently faced by Indian banks can be attributed to forced directed lending by the government through state-run banks. The government shouldn’t do the mistake again. Let banks operate with autonomy in their lending operations.
courtesy: First Post
Successive Finance Ministers ruin the Public Sector Banks by pressurising to give mass loans.After that they themselves will make comments " PSBs working is not satisfactory"
History repeats again again!
Note: For youngsters: The third photo is Janardhana Poojary, the Finance Minister in 1980s
Source :Indian Bank Kumar
Friday, 25 September 2015
Mega credit campaigns are being conducted all over the country by Public Sector Banks (PSBs) from 25th September to 2nd October 2015
Mega credit campaigns are being conducted all over the country by Public Sector Banks (PSBs) from 25th September to 2nd October 2015
Mega Credit Campaigns are being Conducted all over the Country by Public Sector Banks (PSBs)from 25th September to 2nd October 2015 to not onlyGenerate Greater credit to Micro Enterprisesunder the Pradhan Mantri Mudra Yojana (PMMY)but also create a sound eco System Subsequently for bank Credit to Aspiring Entrepreneurs; 35.60 lakh Borrowers have Availed of Credit under Mudra to the tune of Rs. 24,123 crore up to 22nd September 2015 during the Current Financial year 2015-1;. of these, 52% Beneficiaries are Women and about 50% new Enterprises.
Mega credit campaigns are being conducted all over the country by Public Sector Banks (PSBs) from 25th September to 2nd October 2015 in order to not only generate greater credit to micro enterprises but also create a sound eco system subsequently for bank credit to aspiring entrepreneurs especially small and micro entrepreneurs under the Pradhan Mantri Mudra Yojana (PMMY).
The Finance Minister Shri Arun Jaitley would also participate in one of such Mega Credit Campaigns and would hand-over the loan sanction letters to beneficiaries at a mega campaign being organised by the Punjab National Bank (PNB) tomorrow at Mundka, near Delhi. Dr. Udit Raj, local Member of Parliament, Ms Anjuli Chib Duggal, Secretary, Department of Financial Services and Ms Usha Anathasubramanian, MD, Punjab National Bank would also be attending the aforesaid event. Micro entrepreneurs, very small traders, fruit sellers, and mechanics etc. would be actively participating in the said campaign. Beside Mega credit Campaigns, public awareness is continuing to be generated through the print media, radio jingles and use of banners and posters so that prospective micro entrepreneurs are sensitised about the availability of finance through the formal banking system under PMMY.
MUDRA Ltd. has been established as a subsidiary of SIDBI, with an initial corpus of Rs. 5,000 crore to provide refinance to all banks seeking refinancing of small business loans under PMMY. During the current financial year 2015-16, up to 22nd September 2015, a total of 35.60 lakh borrowers have availed of credit under Mudra to the tune of Rs. 24,123 crore. Of these, 52% beneficiaries are women and about 50% new enterprises. All Public Sector Banks, Regional Rural Banks and Private sector banks have a target of Rs. 1, 22,000 crore during the current financial year for disbursement to small and micro enterprises up to Rs. 10 lakhs. As per extant guidelines, such loans do not need to be supported by collateral security. There are about 5.77 crore small business units in the country in the informal sector which is targeted for benefit under the PMMY, apart from new aspiring micro entrepreneurs.
Steps have been initiated to link trainees of various Government and other institutions with banking finance channels, to advance the skill development effort of the Government to self employment. The Mega credit campaigns are to run from 25th September to 2nd October 2015.
The Pradhan Mantri Mudra Yojana (PMMY) is a significant initiative by the Government to secure bank finance to the vast segment of the population occupied in the informal sector which does not have access to formal bank credit and is forced to rely on informal sources of finance at high cost. Once this unfunded or underfunded segment of the economy is included in the mainstream of bank finance, the lower cost of debt should enhance livelihoods while also bringing them into the growth stream of the economy.
PMMY loans fall into three categories, Shishu (upto Rs. 50,000), Kishore (between Rs. 50,000 – Rs. 5 lakh) and Tarun (between Rs. 5 lakh to Rs. 10 lakh). The current focus of the Government is on the Shishu category of micro loans which encompass a range of small activities like shopkeepers, fruit sellers, vegetable vendors, mechanics, barbers, cobblers, small manufacturing units and a lot of other small service sector enterprises which borrow from money lenders and informal sources
Source :PIBNEWS.
Sunday, 20 September 2015
Tarun
11:26
What Is MUDRA, and Details of FAQ
What Is MUDRA, and Details of FAQ
1. What is MUDRA?
MUDRA, which stands for Micro Units Development & Refinance Agency Ltd., is a new institution being set up by Government of India for development and refinancing activities relating to micro units. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide funding to the non corporate small business sector.
2. Why MUDRA has been set up?
The biggest bottleneck to the growth of entrepreneurship in the Non –Corporate Small Business Sector (NCSBS) is lack of financial support to this sector. Majority of this sector does not have access to formal sources of finance. GoI is setting up MUDRA Bank through a statutory enactment for catering to the needs of the NCSBS segment or the informal sector for bringing them in the mainstream. To begin with, it is being set up as a subsidiary of SIDBI.
3. What will be roles and responsibilities of MUDRA?
MUDRA would be responsible for refinancing all Last Mile Financiers such as Non Banking Finance Companies of various types engaged in financing of small businesses, Societies, Trusts, Section 8 Companies [formerly Section 25], Co-operative Societies, Small Banks, Scheduled Commercial Banks and Regional Rural Banks which are in the business of lending to Micro / Small business entities engaged in manufacturing, trading and services activities. The Bank would partner with State / Regional level financial intermediaries to provide finance to Last Mile Financier of Small / Micro business enterprises.
4. What are the offerings of MUDRA? How will MUDRA function?
Under the aegis of Pradhan Mantri MUDRA Yojana, MUDRA has already created its initial products / schemes. The interventions have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to :a. Shishu : covering loans upto 50,000/-b. Kishor : covering loans above 50,000/- and upto 5 lakhc. Tarun : covering loans above 5 lakh to 10 lakh
MUDRA will be operating as a refinancing institution through State / Regional level intermediaries. MUDRA's delivery channel is conceived to be through the route of refinance primarily to NBFCs / MFIs, besides other intermediaries including Banks, Primary Lending Institutions etc.
At the same time, there is a need to develop and expand the delivery channel at the ground level. In this context, there is already in existence, a large number of 'Last Mile Financiers' in the form of companies, trusts, societies, associations and other networks which are providing informal finance to small businesses.
5. Who are the target clients of MUDRA / What kind of borrowers are eligible for assistance from MUDRA?
Non –Corporate Small Business Segment (NCSBS) comprising of millions of proprietorship / partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits / vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, artisans, food processors and others, in rural and urban areas.
6. Are Regional Rural Banks (RRBs) eligible for assistance from MUDRA?
Yes, MUDRA will be extending refinance support to RRBs for enhancing their liquidity.
7. What is the rate of interest charged by MUDRA?
MUDRA will be a refinancing agency which will extend its funds to Last Mile Financiers to enable them to reach out to the sector. Access to finance in conjunction with rational price is going to be the unique customer value proposition of MUDRA. It will use a variety of innovative financing means to bring down the cost of funding for the ultimate borrower.
8. I have a small business dealing in paper goods. Can MUDRA help me?
Yes. MUDRA will offer smaller loans upto 50,000/ under the 'Shishu' category and beyond 50,000 and upto 5 lakh under the 'Kishor' category. These products have been designed to cater to customers operating at the lower end of the enterprise spectrum. The loans will be extended through MFIs, NBFCs, Banks etc.
9. I have graduated recently. I want to start my own business. Can MUDRA help me?
MUDRA offers smaller loans upto 50,000/ under the 'Shishu' category and beyond 50,000 and upto 5 lakh under the 'Kishor' category. It also offers loans beyond 5lakh and upto 10 lakh under the Tarun category. Depending on your nature of business project requirement you can access finance from one of the intermediaries of MUDRA as per the norms.
10. I have diploma in food processing technology. I want to start my own unit. Please guide me.
Food Processing is an eligible activity for coverage under one of the MUDRA schemes. You can avail assistance under MUDRA schemes as per your requirements.
11. I am an artisan specialising in Jari work. I want to start my own work instead of doing job work for others. Can MUDRA help me?
You can avail assistance under the ‘Shishu’ category of Micro Credit Scheme of MUDRA through any of the MFIs operating in your region for setting up your own enterprise.
12. I have done a course on fashion designing. I want to open my own boutique and develop my own brand. What help can MUDRA offer to me?
MUDRA operates a special scheme for women entrepreneurs; viz; Mahila Uddyami Scheme. Assistance will be provided under all three groups, viz. 'Shishu', 'Kishor' as well as 'Tarun'.
13. I intend to work on franchisee model and open an ice cream parlour. Can MUDRA help me?
MUDRA operates a special scheme 'Business loans for Traders and Shopkeepers'. You can avail the facilities under the scheme as per your requirements.
14. I want to expand my pottery business by adding more variety and designs. What help can I get from MUDRA?
You can avail assistance under the 'Shishu' category of Micro Credit Scheme of MUDRA through any of the MFIs operating in your region for setting up your own enterprise.
15. Scope of PMMY & various types of loan available and which are the agencies that will provide loan?
Pradhan Mantri Mudra Yojana (PMMY) will be extended by all Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions and Non Banking Finance Companies. All loans upto a loan size of 10 lakh provided for non farm sector income generating activities since April 08, 2015 is treated as PMMY.
16. Who will monitor the implementation of PMMY?
Monitoring of PMMY will be done at the State level through SLBC forum and at national level by MUDRA / Department of Financial Services, Govt. of India. For this purpose, MUDRA has developed a portal, wherein the banks and other lending institutions directly feed their achievement details which is consolidated by the system and reports are generated for review.
17. Is there any scheme in Central/State Govt., which is applicable all over India, in which loan without guarantee is granted / the guarantors identity is checked?
Pradhan Mantri MUDRA Yojana (PMMY) is a Govt. of India Scheme, which enables a small borrower to borrow from banks, MFIs, NBFCs for loans upto 10 lakh for non-farm income generating activities. Generally, loans upto 10 lakh issued by banks under Micro Small Enterprises is given without collaterals.
18. Are opening of a school, carpentry and RO water plant installation eligible for the loan, If So, what is the maximum and minimum amount of loan?
Carpentry, RO water plant installation, on a business mode, and educational institution are eligible activities under MUDRA loan, if the loan amount is below 10 lakh. The primary requirement for being a MUDRA loan is to be a income generating activity under manufacturing, processing, trading and service sector and the loan amount is below 10 lakh.
19. What is the eligibility of persons for availing MUDRA loans?
Any Indian Citizen who has a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than 10 lakh can approach either a Bank, MFI, or NBFC for availing of MUDRA loans under Pradhan Mantri Mudra Yojana (PMMY). The usual terms and conditions of the lending agency may have to be followed for availing of loans under PMMY. The lending rates are as per the RBI guidelines issued in this regard from time to time.
20. Is there any subsidy under Pradhan Mantri Mudra Yojana (PMMY). If so details thereof?
There is no subsidy for the loan given under PMMY. However, if the loan proposal is linked some Government scheme, wherein the Government is providing capital subsidy, it will be eligible under PMMY also.
21. Kindly provide brief Profile of MUDRA.
MUDRA which stands for Micro Units Development and Refinance Agency Ltd. is a refinance agency and not a direct lending institution. MUDRA provides refinance support to its intermediaries viz. Banks / Micro Finance Institutions / Non Banking Finance Companies, who are in the business of lending for income generating activities in the non farm sector in manufacturing, trading and services sector and who in turn will finance the beneficiaries.
22. Can you provide information on MUDRA Card?
MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner It will provide a facility of working capital arrangement in the form of CC/OD to the borrower. Since MUDRA Card will be a RuPay Debit Card, it can be used for drawing cash from ATM or Business Correspondent or make purchase using Point of Sale machine. Facility is also there to repay the amount as and when surplus is available, thereby reducing the interest burden.
Source :Bankupdates.
Sunday, 6 September 2015
RBI
17:02
Finance Ministry May soon introduce a bill in the Budget session to give statutory status to Mudra Bank.
Finance Ministry May soon introduce a bill in the Budget session to give statutory status to Mudra Bank.
The finance ministry may soon introduce a bill in the Budget session to give statutory status to Mudra Bank. Through a legislation the bank will be set up to regulate micro finance institutions.
The existing Pradhan Mantri Micro Units Development and Refinance Agency (Mudra) Yojana is being executed through NBFC registered with RBI.
The conversion of the present NBFC into the Mudra Bank would take place through the Bill which may be introduced in the Budget session of Parliament next year, sources added.
The role envisaged for Mudra Bank include laying down policy guidelines for micro enterprise financing business as well as registration of MFIs, their accreditation and rating.
The present Pradhan Mantri Mudra Yojana (PMMY) with focus on financing 5.75 crore self-employed provides loans between Rs 50,000-Rs 10 lakh to small entrepreneurs. It has been introduced for development and refinancing activities relating to micro units. The scheme provides refinance to banks and other institutions at 7%.
During the current fiscal, banks will disburse about Rs 1.22 lakh crore to small business units under PMMY. The banking sector has been allocated an overall disbursement target of Rs 1,22,188 crore during 2015-16 for Mutra loans and the banks have already disbursed Rs 15,566 crore as on August 17 to more than 20 lakh borrowers under PMMY.
It has been decided to organise mega credit camps across the country between September 25, and October 2, for PMMY loans so that maximum number of borrowers could get credit as per their requirement under the three categories of loans.
The scheme was launched by Prime Minister Narendra Modi in April. Three products available under the PMMY are Shishu, Kishor and Tarun to signify the stage of growth and funding needs of the beneficiary micro unit or entrepreneur. Shishu covers loans up to Rs 50,000 while Kishor covers above Rs 50,000 and up to Rs 5 lakh.
Tarun category provides loans of above Rs 5 lakh and up to Rs 10 lakh.
Source: The Hindustan Times
