RBI blames banks for Mudra loan defaults: Report

New Delhi: The Reserve Bank of India (RBI) has held banks responsible for bad debts arising out of Mudra loans, according to a report in Business Standard.

RBI Governor Shaktikanta Das reportedly discussed the issue with the heads of public sector banks on July 19.M

In FY19, 9.3 percent of the advances from the Pradhan Manti Mudra Yojana (PMMY) were bad loans, an increase from 5.34 percent in FY17, the report said.

In 2019-20, Rs 49,216 crore has been distributed so far under the PMMY. Rs 3.22 lakh crore was distributed in FY19.

There has been an increase in the number of defaults in small loans, or borrowings up to Rs 50,000, sources told the publication.

The PMMY has three categories of loans – Shishu, or loans up to Rs 50,000; Kishor, covering loans between Rs 50,000 and Rs 5 lakh; and Tarun which covers loans between Rs 5 lakh and Rs 10 lakh.Around 12.39 percent of advances under the Shishu category are bad loans. For Kishor loans, the numner is 10.19 percent, the report said citing RBI estimates.