Loan Mela: PSBs Dole Out Over Rs2.82 Lakh Crore under Mudra Yojana; SBI Tops the List with 55.96 Lakh Proposals Worth Rs86,293 Crore
Moneylife Digital Team 02 April 2019
As if taking a clue from the loan melas organised during Congress regime, public sector banks (PSBs) have doled out crores of rupees under the Pradhan Mantri Mudra Yojana (PMMY), reveals a reply received under Right to Information (RTI). State Bank of India (SBI) has sanctioned loans worth Rs86,293.37 crore, followed by Bank of Baroda, which granted loans of Rs14,974.32 crore. While the state-run banks are on a spree to provide loans under PMMY, the Reserve Bank of India (RBI) had raised a red flag on spike in non-performing assets (NPAs) under the scheme. 
In addition, all these loans under PMMY are collateral free loans and to mitigate the issue MUDRA or Micro Units Development and Refinance Agency Ltd, offers credit guarantee fund for micro units (CGFMU).  
Interestingly, most of the PSBs who have replied to the RTI application have stated that they have no information or do not maintain data on total number of loan proposals received under the PMMY. United Bank of India, however, replied that it had received 3.04 lakh applications under the loan scheme. Here are the points on which information was sought from PSBs under RTI.
  • Total number of loan proposals received under the Prime Minister Mudra Yojana (PMMY)
  • Total number of loans sanctioned out of the loan proposals received
  • Cumulative amounts of the loans sanctioned under PMMY
  • Maximum amount of loan sanctioned under PMMY to a single beneficiary 
  • Minimum amount of loan sanctioned under PMMY to a single beneficiary
So far, seven lenders have replied to the RTI. All banks have made sure to follow the rules of loan under PMMY and sanctioned loans ranting from Rs5,000 to Rs10 lakh to an individual borrower.
Here are the questions asked and replies received from seven PSBs under the RTI Act…
According to, during FY18-19, a total loan worth Rs2,82,594.30 crore was sanctioned for 5.41 crore proposals. Out of this sanctioned loan, so far an amount of Rs2,73,748.57 crore has been disbursed to borrowers by lenders, the portal says.
RBI Not Happy with Increasing NPAs in PMMY
In January this year, RBI cautioned the ministry of finance that the PMMY scheme might turn-out to be the next big source of NPAs which have plagued the banking system. The central bank has flagged that bad loans under PMMY have risen to Rs11,000 crore.
As per the annual report of PMMY, 2017-18, total disbursements under the scheme stood at Rs2.46 lakh crore in FY2018. 
Out of this, 40% were disbursed to women entrepreneurs and 33% to social categories. More than 4.81 crore micro borrowers have benefited through PMMY during the year FY2017-18.
The PMMY was launched on 8 April 2015. Under the scheme, banks are required to finance micro and small entrepreneurs for up to Rs10 lakh. Loans can be granted under three categories - up to Rs50,000 under 'Shishu'; Rs50,001-Rs5 lakh under ‘Kishore' and between Rs5,00,001 and Rs10 lakh under ‘Tarun' category.
In addition, RBI's caution comes at a time when the country's financial system in reeling under severe stress due to the IL&FS crisis, which continues to hurt banks with impairments.


3 years ago
Even after these loans, the economy is not doing well! So we've a long road to recovery!!
Bhuvaneswaran K
3 years ago
11 Thousand Crore out of 2.46 Lakh crore is big amount, yes... One party has promised 72 Thousand crore... which will definitely not come back! We are doomed! ROFL! :-(
Ramesh Poapt
3 years ago
future NPA 20000+cr ?
GLN Prasad
Replied to Ramesh Poapt comment 3 years ago
Maybe in future a political party may try to offer a loan waiver scheme exclusively for these borrowers.
v subramanian
3 years ago
Sucheta Dalal taunted that the government goes after small fries when big industrialists and businessmen fly away. Now this article on directed lending. Media will bash the government either way.
Sucheta Dalal
Replied to v subramanian comment 3 years ago
The sheer numbers don't worry you? I wonder why Indira Gandhi's loan melas were criticised in the 1970s? That too by the BJP/ Janata which used to be the main opposition.
GLN Prasad
3 years ago
This is not new in the Banking sector. First, it was Gramodaya, then bottled as PMRY and now in new brand PMMY, and it is known to all bankers that in the very first year itself they treat it as NPA and loss assets, and no auditor/inspecting official even care to go through end use of funds. Some enlightened public and parties question on Banks' role with Mallaya or Nirab as though it is a license that because the bank has not acted on them, banks should not proceed against these PMMY beneficiaries though recovery can be done using Revenue process or filing a police complaint about misuse/abuse. Fortunately, there is AADHAR linking and rating now which gives a scope to avoid such borrower in the future. Bank as a whole has to consolidate and provide a statement zone wise/state wise on the grounding of these schemes and it is far from the truth to say that no data is available. If no data is available, RBI may not come to know of the impending dangers. They are also not serious and because they have to make a comment on paper it was reduced in writing without any seriousness on personal accountability. Because the Government is earnest in promoting entrepreneurship, this is is not a free license for delivery of credit without any responsibility by bankers.
V ganesan
3 years ago
comparing with corporate npa this npa is miniscule in nature.This mudra loan is driving growth engine.For every thing to blame psb is not fair.
3 years ago
I think Mr. Modi wanted to please Small nd micro companies after the demobilisation and GST application they were not happy.
Pure politics, as always PSB’s had to take the blunt.
3 years ago
Mudra scheme was totally unnecessary when all the PSBs had their own schemes for financing small scale industries and small business units. But the main issue is banks inability to identify the needy borrowers. They just achieve the targets. This is where we need to redefine the role of finance ministry. It should not get into bank loan policy issues. It should leave such aspects to RBI. But alas, even RBI is a helpless and spineless spectator.

Further one may be surprised to know even after massive disbursements, a huge numbers of small industries/business have been left out. That is the paradoxical situation. Most of the issues pertain to seriousness in implementing such schemes. Bank soldiers have not been doing their jobs efficiently.
3 years ago
Lakhs of Crores doled out for wannabe chai wallas, pakora wallas and paan wallas. Like Indira-Sanjay SEEUY (Poojari Loans). My savings will evaporate in Modi-Jaitley inflation
3 years ago
bad debts of Rs. 11000 crores is for what period? since the beginning of the scheme or for the fy 2018-19?. And if we take the total sanction amount of Rs 245000 crores the npa amounts to 4.5%.
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