Almost 3% Of Mudra Loans Have Turned Into Bad Loans, Anurag Thakur Says
Employees work in the loan clearing department at a HDFC bank branch in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Almost 3% Of Mudra Loans Have Turned Into Bad Loans, Anurag Thakur Says

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The government on Tuesday said almost 3 percent of loans worth Rs 6.04 lakh crore sanctioned under the Pradhan Mantri Mudra Yojana has turned into bad loans.

Prime Minister Narendra Modi launched the Mudra loan scheme on April 8, 2015, for providing collateral-free loans of up to Rs 10 lakh to non-corporate, non-farm small and micro enterprises.

In a written reply to a question on the Mudra loan scheme in the Rajya Sabha, Minister of State for Finance Anurag Thakur said any complaint received with respect to implementation of the Pradhan Mantri Mudra Yojana, including turning down of loan applications, delay in turnaround time and lenders' insisting on collateral/guarantor on certain occasions, are redressed in coordination with the respective banks.

"Scheduled Commercial Banks and Regional Rural Banks have reported that as of March 2019, against a total amount of Rs 6.04 lakh crore disbursed by them under PMMY since inception of the scheme, an amount of Rs 17,251.52 crore had turned into Non-Performing Assets (NPAs), which is 2.86 percent of the total disbursed amount," the minister said.

Under the Pradhan Mantri Mudra Yojana, loans are given out in three categories—Shishu, Kishore and Tarun—to signify the stage of growth and funding needs of the beneficiary.

Replying to another question, the minister said during the last five financial years, the total number of branches of public sector banks increased to 87,580 as on Mar. 31, 2019, from 78,939 as of March 2014.

The minister also informed the Rajya Sbaha that public sector banks wrote off Rs 47,658 crore, Rs 56,847 crore, Rs 79,048 crore, Rs 1,24,275 crore and Rs 1,86,632 crore during financial years 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19, respectively, according to data from the Reserve Bank of India.

Also read: Mudra Loan Sanctions Slide Amid Asset Quality Concerns 

Of these, write-offs in loans pertaining to "agriculture and allied activities" were Rs 2,833 crore, Rs 6,361 crore, Rs 7,091 crore, Rs 10,345 crore and Rs 12,556 crore in those financial years, respectively.

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