The finance ministry has asked the banks to review all loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY or Mudra loan scheme), as the non-performing assets (NPA) have crossed Rs 11,000 crore within three years of the launch of the scheme.

Pradhan Mantri MUDRA Yojana (PMMY) scheme:

  1. The PMMY Scheme was launched in April, 2015.
  2. PMMY is a scheme to extend collateral free loans by Banks, Non-Banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs) to Small/Micro business enterprises and individuals in the non-agricultural sector to enable them to setup or expand their business activities and to generate self-employment.
  3. Banks, NBFCs and MFIs can draw refinance under the MUDRA Scheme after becoming member-lending institutions of MUDRA.
  4. Mudra Loans are available for non-agricultural activities upto Rs. 10 lakh and activities allied to agriculture such as Dairy, Poultry, Bee Keeping etc, are also covered.
  5. Mudra’s unique features include a Mudra Card which permits access to Working Capital through ATMs and Card Machines.

There are three types of loans under PMMY:

  • Shishu (up to Rs.50,000).
  • Kishore (from Rs.50,001 to Rs.5 lakh).
  • Tarun (from Rs.500,001 to Rs.10,00,000).