Pradhan Mantri Mudra Yojana (PMMY)

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Micro Units Development & Refinance Agency Ltd (MUDRA) is a new institution being set up by Government of India for development and refinancing activities relating to micro units. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016.
The purpose of MUDRA is to provide funding to the Non Corporate Small Business Sector. MUDRA’s basic purpose is to “fund the unfunded” by bring such units in formal financials system and extending affordable credit to them.

  1. Type of Facility :
    • i. Cash Credit for working capital requirement
    • ii. Term Loan for purchase of equipments/machineries/furniture/property
  2. Purpose : Business Purpose
  3. Rate of Interest : 10.22% p.a.
  4. Repayment Period : Maximum5 years including moratorium
  5. Margin : Minimum 30%
  6. Processing Charges : 0.25% + service tax
  7. Legal charges / Membership / Credit Assessment : As per prevailing norms
  8. Registration of Bank’s Charge : As per Prevailing norms
  1. Eligibility :
    • i. Individuals
    • ii. Others-Proprietary concern, Partnership Firm, Pvt Ltd Co, Ltd Cos, LLP, SHG, AOP, BOI
  2. Income Eligibility :
    • i. In case of Existing set up: Income sufficient to take care of EMIs of applicant/s through cash accruals
    • ii. In case of New Set up: On projection basis acceptable to Bank
  3. Age : Maximum up to 60 years. Deviation in age or with co-applicant acceptable to bank on case to case basis.
  4. Eligible sectors/activities are as follows :
    • i. Land transport sector :purchase of transport vehicles for goods personal transport such as auto rickshaw, small goods transport vehicles, 3 wheelers, e-rickshaw, passenger cars, taxis etc
    • ii. Community, social and personal service :activities such as saloons, beauty parlours, gymnasium, boutiques, tailoring shops, dry cleaning, cycle and motorcycle repair shop, DTP and photo copying facilities, medicine shops, courier agents etc
    • iii. Food product sector :for activities such as papad making, achar making, jam/jelly making, agricultural produce and preservation at rural level, sweet shops, small service food stalls and day to day catering/canteen services, cold chain vehicles, cold storages, ice making units, ice cream making units, biscuit, bread and bun making etc.
    • iv. Textile product sector/activity :activities such as handloom, powerloom, chikan work, zari and zardozi work, traditional embroidery and hand work, traditional embroidery and hand work, traditional dyeing and printing, apparel design, knitting, cotton ginning, computerized embroidery, stitching and other textile non garment products such as bags, vehicle accessories, furnishing accessories etc.
  1. Prime Security : Mortgage of property/Hypothecation of Machinery, furniture/stock/ book debts etc
    Clean limit should not exceed Rs. 5.00 Lacs
  2. Collateral Security : To explore the possibility
  3. Review/Renewal : For Cash Credit facility, annual review/renewal is necessary
  4. Guarantors : Minimum One acceptable guarantor
  5. Sanctioning Authority : Regional Head
  6. Conduct of Account : Satisfactory CIBIL report with prevailing norms.
  7. Stamp Duty for Documentation : Expenses to be borne by the applicant
  8. Insurance of Asset : Insurance of underlying asset with Bank Clause till existence of the loan amount preferably through TJSB
  9. Submission of stock statements :
    • i. For Clean Cash Credit Limit up to Rs. 5.00 Lacs- Not applicable
    • ii. For Cash Credit Limit above Rs. 5.00 Lacs- Monthly basis as per regular format
Sr. No. Category Loan Amount
1. Shishu Loans up to Rs. 50,000/-
2. Kishore Loans above Rs. 50,000/- to Rs. 5,00,000/-
3. Tarun Loans above Rs. 5,00,000/- to Rs. 10,00,000/-

In future, scheme would similarly be added for other sectors/activities as well.

The segment of such units mainly consists of non farm enterprises in manufacturing, trading and service whose credits needs are below Rs. 10.00 Lacs. Loans to be given to this segment for income generation will be known as “MUDRA” loans under Pradhan Mantri Mudra Yojana (PMMY).

**"Conditions Apply. Loan at sole discretion of the Bank”

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