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Mudra loans in Punjab, Haryana under stress

Vijay C Roy

Tribune News Service

Chandigarh, November 29

The number of growing NPAs under Pradhan Mantri Mudra Yojana is giving sleepless nights to bankers in Punjab and Haryana. Over 7% of the total outstanding debt has become non-performing assets (NPAs) in these two states as against 3% nationally. These loans were extended by banks, NBFCs, RRBs, cooperative banks and small finance banks.

Perturbed over the situation, the RBI has written a letter to the banks in the region to undertake due diligence before sanctioning any fresh loans.

The loans were given primarily for non-agricultural activities or those allied to agriculture such as dairy and poultry sector. Loans have also been given to non-corporate small business segments or manufacturing units, vendors, shopkeepers, women, youth and small-time entrepreneurs.

The scheme aims to strengthen forward and backward linkages across the entire value chains anchored by industries, aggregators, franchisees and associations.

In Haryana, out of total outstanding of Rs 3,451 crore as of September 2019, Rs 251 crore were NPAs, which is 7.30% of the total outstanding. The NPAs of the public sector banks were 9.6% followed by Sarv Haryana Gramin Bank (5%) and private sector banks (3%). According to sources, the NPAs of public sector banks were higher because they have huge exposure to loans as compared to others.

Similarly in Punjab, the NPAs under Mudra loan were 7.10% as of September 2019. Banks in the state disbursed Rs 2,494.60 crore under the scheme to around 1.78 lakh beneficiaries.

Under the scheme, loans up to Rs 50,000 that are disbursed without any processing fee are categorised as ‘Shishu’, those under Rs 5 lakh as ‘Kishore’ and those of Rs 5-10 lakh with a small processing fee as ‘Tarun’. According to the bankers, a majority of loans disbursed under Shishu category have become NPAs. 

Bankers in the region, on the condition of anonymity, said they had received a letter from the RBI to remain cautious while lending under Mudra Yojana. Chairing a meeting held recently, LV Prabhakar, executive director, Punjab National Bank, said due diligence should be undertaken before sanctioning loans. 



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