RBI red-flags rising stress in Mudra loans, asks banks to monitor closely

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Reserve Bank of India deputy governor MK Jain on Tuesday raised red flags over rising non-performing assets (NPAs) in loans disbursed under the government’s Mudra loan scheme and urged banks to monitor the repayment capacity of borrowers before disbursement. The Pradhan Mantri Mudra Yojana is a central government scheme under which small businesses can avail collateral-free working capital loan up to Rs 10 lakh. The scheme was flagged off in 2015 by PM Modi to ease the credit flow to India’s MSME sector.

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    Reserve Bank of India deputy governor MK Jain on Tuesday raised red flags over rising non-performing assets (NPAs) in loans disbursed under the government’s Mudra loan scheme and urged banks to monitor the repayment capacity of borrowers before disbursement. The Pradhan Mantri Mudra Yojana is a central government scheme under which small businesses can avail collateral-free working capital loan up to Rs 10 lakh. The scheme was flagged off in 2015 by PM Modi to ease the credit flow to India’s MSME sector.

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