Mudra Scheme: A little known small finance bank from Bengaluru has accumulated Rs 2,193 crore worth loan defaults under Mudra Yojana, Prime Minister Narendra Modi’s flagship scheme for providing collateral-free loans to small businesses. Jana Small Finance Bank which got banking licence from Reserve Bank of India just two years ago accounts for more than 12% of the total defaults under the Mudra scheme, just behind India’s largest lender State Bank of India. Jana Small Finance Bank Limited started banking operations on March 28, 2018, according to an RBI release.
Loans under Mudra scheme has seen a spike in defaults in recent times. According to the latest official data, the total non-performing assets (NPAs) under the scheme has touched Rs 17,651 crore.
State Bank of India accounts for the highest defaults under Mudra Scheme at Rs 2,694.22 crore. India’s second largest public sector bank, Punjab National Bank, is in the third place with the NPAs worth Rs 1605.13 crore under Mudra Scheme. PNB is followed by Bank of India (Rs 965.77 crore), Canara Bank (Rs 921.46 crore), Syndicate Bank (Rs 845.14 crore), Union Bank of India (Rs 546.71 crore), Bank of Baroda (Rs 522.99 crore), Bank of Maharashtra (Rs 449.66 crore) and Allahabad Bank with NPAs worth Rs 382.15 crore.
The 10 banks including Jana Small Finance Bank account for 11482.58 crore, almost two thirds of the total NPAs under the Mudra Yojana. However, except Jana Small Finance Bank (Jana SFB), all other banks in the list of top 10 banks having highest NPAs under Mudra Scheme are public sector banks.
Under the Mudra scheme, bank offers small loans from Rs 50,000 to Rs 10 lakh without any bank guarantee.
Public sector banks, RRBs, NBFCs have sanctioned loans worth Rs 8.93 lakh crore since the inception of the scheme. Under Mudra scheme, banks give loan up to Rs 10 lakh for either setting up a new business or for expanding an existing business.
AU SFB (Rs 155.11 crore), Suryoday SFB (Rs 82.09 crore), Ujjivan SFB (Rs 66.32 crore) are among the seven small finance banks that have figured in the list of 46 scheduled commercial banks submitted by Anurag Thakur, minister of state for finance, in response to a question in the Rajya Sabha.
Queries from Financial Express Online about its NPAs under the Mudra Scheme did not elicit any response from Jana Small Finance Bank.