What is MUDRA Bank ?

Highlights:  
 
  • The term MUDRA stands for Micro Units Development and Refinance Agency .
  • Prime Minister Narendra Modi recently launched MUDRA Bank under the Pradhan Mantri Jan Dhan Yojana. 
  • The main purpose of Mudra was to create as many MFIs as possible.
  • This will provide credit of up to Rs 10 lakh to small entrepreneurs and act as a regulator for 'Micro-Finance Institutions' (MFIs).
  • It aimed at providing a collateral-free soft loans of up to R10 lakh to small businesses.
  • Now in India big industrial houses provide jobs to only 1.25 crore people, while small entrepreneur s employ 12 crore people. 

Features:
  • MUDRA aims to fund the unfunded small entrepreneurs; need to strengthen savings habit in the country.
  • Farmers are going through various problems due to seasonal calamities.
  • The Govt. ionstructed to banks and insurance companies to provide  financial help.
  • The roles envisaged for MUDRA include laying down policy guidelines for micro enterprise financing business and registration of MFI entities as well as their accreditation and rating. 
  • There are about 5.77 crore small business units. 
  • MUDRA is to be set up through a statutory enactment.
  • Mudra, which has a corpus of R20,000 crore, has been incorporated as a SIDBI subsidiary, but would later be converted to a bank.
  • Mudra scheme is aimed at funding the unfunded. 

10 top points about the bank:
  • 1. MUDRA Bank will provide credit of up to Rs 10 lakh to small entrepreneurs and act as a regulator for 'Micro-Finance Institutions' (MFIs).
  • 2. The roles envisaged for MUDRA include laying down policy guidelines for micro enterprise financing business and registration of MFI entities as well as their accreditation and rating.
  • 3. There are about 5.77 crore small business units.
  • 4. Among others, MUDRA would benefit small manufacturing units, shopkeepers, fruits and vegetable sellers, hair saloon, beauty parlours, truck operators, hawkers, artisans in rural and urban areas with financing requirements up to Rs 10 lakh.
  • 5. MUDRA has a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore.
  • 6. The initial products and schemes that have been created have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stage of growth/development and funding needs of the beneficiary micro unit/entrepreneur.
  • 7. Shishu would cover loans up to Rs 50,000 while Kishor above Rs 50,000 and up to Rs 5 lakh. Tarun category will cover loans of above Rs 5 lakh and up to Rs 10 lakh.
  • 8. MUDRA is to be set up through a statutory enactment. 
  • It would be responsible for developing and refinancing through Pradhan Mantri MUDRA Yojana.
  • 9. MUDRA would also partner with state/regional level coordinators to provide finance to "Last Mile Financiers" of small/micro business enterprises.
  • 10. Measures to be taken up by MUDRA are targeted towards mainstreaming young, educated or skilled workers and entrepreneurs including women entrepreneurs.