All You Need to Know about Mudra Bank Loan

 

Mudra loan has come up with very exiting offers. Pradhan Mantri Mudra Yojana is a new scheme that offers Loan to establish business. According to Pradhan Mantri Yojana, you can avail Mudra loan by providing the necessary Mudra loan documents. You should also know the Mudra loan eligibility and details of your available Mudra scheme. You should also know the Mudra loan interest rates. Here you will find all your Pradhan Mantri Mudra loan or Mudra loan details. How to apply for Mudra loan? Well, that’s very easy. You just have to submit the Mudra loan application form to your nearby Mudra branch for a Mudra bank loan. Here you will find Mudra bank branches list and Mudra bank loan eligibility criteria.

PradhanMantri Mudra Yojana scheme has come up with a purpose to help all kind of small businesses and companies financially to start their business. All kind of micro units or companies can avail this kind of loan for their business growth. Mudra Loan is available from Public sector banks, Regional Rural banks, Private sector banks, Microfinance institutions, Non-Banking Financial Institutions and Co-operative banks.

 

What are Micro Units?

Micro means small. In India all kind of small organization, start-ups or companies are known as Micro units. There is a common thing in all kind of micro unit and that is lack of funds to support their business financially. These kind of small companies have fewer employees and they have financial issues.

To fulfill the financial needs of the companies or non- corporate small businesses, Indian Government has come up with Micro Units Development and Refinance Agency Banks.  The Micro Units Development and Refinance Agency Banks play a great responsibility that includes preparation as well as launch of policy guidelines and regulation and registration of Micro finance institutions. They also run credit guarantee Mudra scheme. With all these features they help to create a good architecture for all kind of micro businesses. They are always ready to offer financial assistance to Micro Units.

 

Categories of PradhanMantri Mudra Yojana

Different micro units have different kind of growth stage, development as well as funding requirements. Depending on these three criteria we can classify micro units. There are three categories of PradhanMantri Mudra Yojana such as:

  1. Shishu or child Category:

Shishu or child Category is mainly for those small companies or start ups that has just started their company and looking for a financial Mudra bank loan. The loan cover offered for this kind of micro unit is up to rupee 50,000.

  1. Kishor Category:

Kishor Category is offered to those companies that have started their business but they are not yet established. This category can get a loan cover ranges from Rs.50, 000 to Rs.5 lakh

  1. Tarun Category:

Tarun Category is applicable for those companies that have already started and established their company business. This loan is provided to this kind of companies to help them to expand their businesses or to buy assets. The loan cover offered for this kind of micro unit ranges from Rs.5 lakh to Rs.10 lakh.

 

Mudra bank loan eligibility (PradhanMantri Mudra Yojana)

To avail a Mudra Loan, the applicant must be from the given Non-corporate Small Business Segment:

  • Fruit or vegetable vendors
  • Proprietorship
  • Small manufacturing units
  • Shopkeepers
  • Partnership firms
  • Service sector units
  • Small industries
  • Repair shops
  • Truck operators
  • Food service units
  • Food processors
  • Machine operators
  • Other industries in rural and urban areas.

The Lender’s Mudra loan Eligibility criteria is mentioned below

  • The bank chosen by the company must be a commercial bank in public or privet sector. The bank must have three years of track record continuously and their net NPAs should not exceed 3%. The bank will be eligible to lend the loan when their minimum net worth will become rupees 100 crore as well as their CRAR will not be less than 9%.
  • The rural banks can also lend loan if they have a net NPA within 3%. The rural banks will become eligible to lend a loan when they have a profitable operation or growth in business. They must not carry any kind of accumulated losses and the CRAR should exceed 9%.
  • All kind of Small business companies and Micro Finance institutions are eligible if they fulfill the above requirements.

Purpose of PradhanMantri Mudra Yojana

Mudra loan can be availed to mainly support your small business or company financially. Some small company can start their business with sufficient loan amount with the help of Mudra loan. Mudra loan can be availed for many other purposes. The purposes are listed below:

  • Loan for working capital requirement
  • Commercial vehicle loan
  • Two wheeler loan
  • Renovating the business space
  • Car loan
  • Drop line overdraft or working capital loans or overdraft facility is provided to business groups and rural businesses.
  • Buying plant and machinery

 

How to apply for Mudra Loan

Mudra loan is very important go give your start-up business a boost start. Application process of Mudra loan is easy. To apply for PradhanMantri Mudra Yojana for all the categories, you just have to follow the below mentioned process:

  • You must visit your nearest private sector or commercial bank to avail your PradhanMantri Mudra Yojana loan. The loan applicant himself should visit the bank for further documentation process.
  • The loan applicant will have to present the business idea with the Mudra loan application form. Applicant has to submit all the necessary identification Mudra loan documents along with the other documents required.
  • As per the bank instructions, borrower will have to fill up all the forms and formalities.
  • After a successful completion of all the above mentioned process, the loan will be sanctioned and made available for the company’s further use.

 

Mudra Loan Documents

There are different kinds of loan available under the PradhanMantri Mudra Yojana loan fecility. Different kind of loan application needs different kind of documents. Here we have listed some of the loan application and their documents requirement.

  1. Vehicle loan: If the loan applicant is willing to buy a vehicle for business purposes under the Mudra loan or Pradhan Mantri Mudra loan scheme then he needs to submit the below mentioned documents:
  • A duty filled PradhanMantri Mudra Yojana application form.
  • Duty filled vehicle loan application form.
  • 2 recent passport sized photos of the applicant.
  • Photo identity proof of the applicant
  • Address proof as well as income proof of the borrower.
  • Last 6 month’s bank statement.

 

  1. Business installment loan:

If you are willing to take a business installment loan for the initial installment process of your business then you can avail Mudra loan under the Pradhan Mantri Mudra Yojana scheme. You need to submit the below mentioned documents:

  • Duty filled Pradhan Mantri Mudra Yojana application form
  • Duty filled Business Instalment loan application form.
  • Photo identity proof of the applicant
  • Address proof of the applicant.
  • Last 6 month’s bank statement.
  • Office and residence proof.
  • Proof of establishment
  • Ownership proof
  • Qualification proof.
  • Proof of continuity of business.
  • Trade references.

 

Business loan:

If you are willing to start your business in a rural area then you must go for a business loan under the Pradhan Mantri Mudra Yojana. You need to submit some specific documents to avail the loan. The document requirement is listed below.

  • Duty filled Pradhan Mantri Mudra Yojana application form
  • Duty filled Business Instalment loan or duty filled Rural Business Credit application form.
  • Photo identity proof, age proof as well as address proof of the borrower.
  • Proof of ownership of residence or office.
  • Proof of business vintage.
  • Last 2 years Income Tax Return document.
  • Last 12 month’s bank statement.

Mudra Loan interest rates:

Different bank has different Mudra loan interest rates, processing fee, loan amount and tenure. Here we have listed some of the private banks interest rates for Mudra loan as well as other loan related details.

Bank Interest Rate Processing Fee Loan Amount Tenure
HDFC Bank 10.99% to 20.70% Up to 1.5% Maximum INR 15 lakhs 1 to 5 years
ICICI Bank 10.99% to 17.99% 2.25% Maximum INR 20 lakhs 1 to 5 years
Oriental Bank of Commerce 10.65% to 11.65% 0.50% INR 50,000 to INR 10 lakhs 1 to 5 years

 

Mudra Loan or Pradhan Mantri Mudra Yojana Application form

The application process of Mudra loan is very easy. You just need to visit your nearest private sector bank to avail Mudra loan. You need to mention Enterprise name and category for official use.

1. Business information:

  • Name of the enterprise
  • Constitution if it is proprietary, private limited firm, partnership firm, or limited company. If it is any other kind of firm, then you have to specify that.
  • Current business address
  • Telephone and mobile number
  • Email address
  • Business activity that is existing and proposed.
  • Date of commencement of business
  • The registration number of the business
  • Registered office address
  • Social category that is SC, ST, OBC or Minority community. If it is a minority community, then it must be mentioned.

2. Information about the proprietor:

  • Name
  • Date of birth
  • Sex
  • Residential address
  • Mobile number
  • Academic qualification
  • Experience in years
  • ID proof and ID proof number
  • Address proof and address proof number
  • PAN card or DIN number
  • Relationship with the officials or director of the bank, if any.

3. Names of associate concerns:

  • Name of the associate concern
  • Address of the associate concern
  • Bank that the associate concern is associated with.
  • Nature of the associate concern
  • Extent of interest as a proprietor, partner, director or investor in the associate concern

4. Existing banking or credit facilities

The following Mudra loan details must be filled:

  • The type of facilities allowed
  • Bank that the business is associated with
  • Limit availed
  • Outstanding amount
  • Security lodged
  • Asset classification status
  • Customer ID
  1. Credit facilities proposed and the amount and the purpose and the details of the security offered must be mentioned in rupees.
  2. In case of working capital, the actual sales and projected sales information has to be clearly mentioned.
  3. In case of term loan requirement, the details of the machinery or equipment have to be provided. The details of the type of the machinery, purpose, supplier name, and cost of machine, contribution made by promoter and the loan required must be filled in.
  4. The past performance and future estimates of sales, profit and capital must be mentioned.
  5. Statutory obligations’ status has to be mentioned. The statutory obligations are:
  • Registration under Shops and Establishment Act
  • Registration under MSME
  • Drug License
  • Latest Sales Tax Return filed
  • Latest Income Tax Returns filed
  • Any other statutory dues that is outstanding.
  1. The final part is the declaration, which requires you to pin up 3 passport sized photographs and the signature of the proprietor, partner or director, whose photographs have been affixed.
  2. The borrower will get an acknowledgement slip that includes the following:
  • Application number
  • Date of application
  • Loan amount requested
  • Name of the applicant
  • Signature of the applicant
  • Signature and seal of the branch official

 

What are the key objectives of the PradhanMantri Mudra Yojana?

Mudra Yojna concept was created to help backward people or small businesses financially for establishment of their small businesses. Mudra Youja has many benefits for its customers. The key benefits of Mudra Youjna are mentioned below:

  • Mudra Yojna can help a company or individual to lay down the business policy guidelines for financing small businesses or micro enterprises.
  • For getting all the Microfinance Institutions and related entities registered
  • For regulating all kind of Microfinance Institutions and related entities
  • For helping the small businesses to grow further and develop
  • For helping lower income groups to build and expand their business
  • To help unbanked people for creating easy access to finance
  • It can help a person o organization in lowering their cost of finance
  • To provide SC or ST lending preference
  • Mudra Youja helps to regulate all kind of trading, manufacturing, and services Micro Finance institutions.

 

What are the loan limits and interest rates under this scheme?

Depending on your choice of loan and financing available under the loan scheme, the loan limits and interest rates will vary. This can help small businesses in their growth of business and it also helps them to accommodate properly. The different application and their loan limits and rates are mentioned below.

  1. Shishu – In this category, the upper limit of loan is up to INR 50,000. The loan interest rate is only 1 percent/month. For one year its only 12 percent/annum. The repayment period for Sishu loan is up to 5 years.
  2. Kishore – In this category, the limit of loan is ranging from INR 50000 up to INR 5,00,00. The interest rate of this kind of loan depends on the bank. The interest rate mainly depends on applicant’s credit history as per the guidelines of the schemes. Loan repayment period is depending on the bank’s guideline.
  3. Tarun – In this category, the limit of loan is ranging from INR 5,00,000 up to INR 10,00,000. The interest rate of this kind of loan depends on the bank. The interest rate mainly depends on applicant’s credit history as per the guidelines of the schemes. Loan repayment period is depending on the bank’s guideline.

 

Top Banks and Financial Institutions providing MUDRA Loan

Mudra Loan is available from Public sector banks, Regional Rural banks, Private sector banks, Microfinance institutions, Non-Banking Financial Institutions and Co-operative banks.

The available numbers of Mudra bank branches list are listed below:

  • 25 Non-Banking Financial Institutions
  • 27 Public Sector Banks
  • 31 Regional Rural Banks
  • 4 Co-operative banks
  • 36 Microfinance Institutions
  • 17 Private Sector Banks

 

The above mentioned banks are selected to distribute Mudra loan as of now. 60% of the loan will be offered under “Shishu” loan option. And people will get the remaining 40% loan under ‘Kishore’ and ‘Tarun’ schemes.

 

Top 10 Public Sector Mudra bank branches list

  • UCO Bank
  • State Bank of India
  • Canara Bank
  • Bank of India
  • Syndicate Bank
  • Indian Bank
  • Punjab National Bank
  • Bank of Baroda
  • Central Bank of India
  • Allahabad Bank

 

Top 10 Private Sector Banks providing MUDRA Loan

  • HDFC Bank
  • IndusInd Bank
  • Axis Bank
  • ICICI Bank
  • Ratnakar Bank
  • Yes Bank
  • Karnataka Bank Karur Vysya Bank
  • South Indian Bank
  • Lakshmi Vilas Bank

Top 10 Regional Rural Banks providing MUDRA Loan

  • Uttar Bihar Gramin Bank
  • Pragathi Krishna Gramin Bank
  • Karnataka Vikas Grameena Bank
  • Kerala Gramin Bank
  • Madhya Bihar Gramin Bank
  • Baroda UP Gramin Bank
  • Baroda Rajasthan Ksethriya Gramin Bank
  • Andhra Pragathi Gramin Bank
  • Pallavan Grama Bank
  • Allahabad UP Gramin Bank

 

In a simple word PradhanMantri Mudra Yojana scheme can help a company to start and establish their business. You just need to visit your preferred bank and show them the business idea and you can get your loan approved. The interest rate is also very low to help Micro units.

 

 Mudra Bank Loan FAQs

What is the purpose of Mudra Scheme?

Mudra scheme mainly gives financial support for all kind of Non-Corporate Small Business Sector (NCSB) where more than 120 million Indian employees are working. The informal sector has always been marginalized in the country with 90% of the sector that is out of the formal finances sector. Government of India aims at the gap of financial bridging of NSCB initiatives with the help of Mudra scheme.

Who will be targeted under the Mudra scheme?

Mudra is giving financial support and refinancing all kind of needs for trusts, co-operative societies, societies, scheduled commercial banks, section 8 companies, small banks and other rural banks and NBFCs that provide financing to small and micro business.

What does Mudra offer?

Mudra is offering three different loan schemes:

Shishu: Avail loans up to Rs.50,000

Kishor: Avail loans above Rs.50,000 and up to Rs.5 lakhs

Tarun: Avail loans above Rs.5 lakhs and up to Rs.10 lakhs

When does the Pradhan Mantri Mudra Yojana come into effect?

After 8th April 2015, all loans up to Rs.10 lakhs have been sanctioned. These loans were sanctioned for income generating activities other than farm related fall under the PMMY loan scheme.

Who should I approach for Mudra loans?

Central Government of India has chosen different kind of financial units where you can avail loan. You can approach you nearby public sector banks, regional rural banks, private sector banks, cooperative banks, foreign banks, NBFCs and MFIs.

 

What is Mudra Card?

The Mudra Card is a comprehensive benefit that comes in form of a card.  This card can offers working capital whenever needed through CC or OD whenever needed. The card functions as RuPay Debit Card. You can withdraw cash from ATM using this Mudra card or you can use it for making purchases through Point of Sale machines. You can also credit money into your Mudra card to reduce quantum of interests.

 

Who do I send grievance or feedback to?

If you want to send any kind of grievance or complaints then you can contact the zonal or regional manager of the respective bank/NBFC/MFI.

 

A lending institution near my house has refused me loans under PMMY scheme. What do I do now?

You should escalate the grievance to higher authorities within the lending institution.