New Delhi, Aug 6 The Non-Performing Assets (NPAs) of Public Sector Banks linked to Mudra loans for small and micro enterprises have come down to 3.4 per cent of total loans during the financial year ended March 31, 2024 from 4.89 per cent in 2019-20, Finance Minister Nirmala Sitharaman has informed Parliament.
She said that NPAs of private sector banks linked to Mudra loans declined to 0.95 per cent of total loans in 2023-24 from a peak of 1.77 per cent in 2020-21.
Similarly, the NPAs of Regional Rural Banks, Small Finance Banks and State Cooperative Banks associated with Mudra loans have also come down, reflecting an improvement in the asset quality.
FM Sitharaman further stated that as far as interest rates on Mudra loans are concerned Public Sector Banks offer rates between 9.15 per cent and 12.80 per cent while private sector banks charge between 6.96 per cent to 28 per cent.
However, monitoring mechanisms are in place to ensure fair recovery processes and address any instances of harassment, she added.
She pointed out that data on NPAs is collected every year to ensure that public and private sector banks follow up on their recovery processes diligently.
The Mudra loan scheme, launched in 2015 under the Pradhan Mantri MUDRA Yojana (PMMY), aims to provide financial support to micro and small enterprises.
PMMY is a scheme launched in 2015 for providing loans up to 10 lakh to small and micro enterprises aimed at uplifting the poor.
This limit has now been increased to Rs 20 lakh in the Budget for 2024-25.
This initiative is particularly beneficial for individuals who face financial constraints in starting their own businesses.
The increased loan limit means that they can now access up to Rs 20 lakh, which will be directly transferred to the beneficiary’s bank account.
This financial support is expected to significantly boost self-employment and entrepreneurship across the country.
The borrowers can approach banks directly for Mudra loans or apply through the official portal www.udyamimitra.in.
The PMMY offers three products: ‘Shishu,’ ‘Kishore,’ and ‘Tarun,’ catering to different stages of growth and funding needs for micro units and entrepreneurs.
Borrowers will need to pay an upfront guarantee fee and an annual fee based on the reduced loan balance.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor