NPA spike in MU­DRA loans: RBI cau­tions govt

The Free Press Journal - - NATION - AGEN­CIES /

The Re­serve Bank of In­dia (RBI) has raised a red-flag on the spike in non-per­form­ing as­sets (NPAs) un­der the gov­ern­ment's flag­ship scheme to sup­port mi­cro en­ter­prises in the coun­try – the Prad­han Mantri Mu­dra Yo­jana.

Ac­cord­ing to Finance Min­istry sources, RBI has cau­tioned the min­istry that the scheme might turn-out to be the next big source of NPAs, which have plagued the bank­ing sys­tem, re­ports IANS.

The cen­tral bank has flagged that bad loans un­der PMMY have risen to Rs 11,000 crore.

As per the an­nual re­port of PMMY, 2017-18, to­tal dis­burse­ments un­der the scheme stood at Rs 2.46 tril­lion in FY 18.

Out of this, 40 per cent were dis­bursed to women en­trepreneurs and 33 per cent to so­cial cat­e­gories. More than 4.81 crore mi­cro bor­row­ers have ben­e­fited through PMMY dur­ing the year FY2017-18.

The PMMY was launched on April 8, 2015. Un­der the scheme, banks are re­quired to finance mi­cro and small en­trepreneurs for up to Rs 10 lakh. Loans can be granted un­der three cat­e­gories - up to Rs 50,000 un­der 'Shishu'; Rs 50,001-Rs 5 lakh un­der 'Kishore' and be­tween Rs 5,00,001 and Rs 10 lakh un­der 'Tarun' cat­e­gory.

In ad­di­tion, RBI's cau­tion comes at a time when the coun­try's fi­nan­cial sys­tem in reel­ing un­der se­vier stress due to the IL&FS cri­sis which con­tin­ues to hurt banks with im­pair­ments, the most re­cent case be­ing In­dusInd Bank.

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