New Delhi, Jan 6: The Union Cabinet, chaired by Prime Minister Narendra Modi has given its approval for the creation of a Credit Guarantee Fund for Micro Units Development Refinance Agency (MUDRA) loans and to convert MUDRA Ltd. into MUDRA Small Industries Development Bank of India (SIDBI) Bank as a wholly owned subsidiary of SIDBI.
The Fund is expected to guarantee more than Rs 1, 00,000 crore worth of loans to micro and small units in the first instance.
The MUDRA (SIDBI) Bank will undertake refinance operations and provide support services with focus on portal management; data analysis etc. apart from any other activity entrusted/ advised by Government of India.
Notably, MUDRA Bank and a Credit Guarantee Fund was proposed to be set up with a refinance corpus of Rs. 20,000 crore and a corpus of Rs.3,000 crore respectively as per the Budget Speech for 2015-16. As a precursor to the launch of the Pradhan Mantri MUDRA Yojana (PMMY) in April, 2015, MUDRA Ltd. was set up as a corporate subsidiary of SIDBI in March, 2015.
The RBI has allocated Rs 20,000 crore and the first tranche’ of Rs 5000 crore has been received by MUDRA as refinance.
