Modi Government’s Big Gift: Mudra Loans Becomes Cheaper; Interest Rebate Given for 1 Year under PMMY

The Union Cabinet chaired by PM Narendra Modi has approved a scheme for interest subvention of 2%, to all Shishu loan accounts under Pradhan Mantri Mudra Yojana (PMMY) to eligible borrowers. The Prime Minister's Office or PMO has informed about the decision. It said that the decision will be applicable for a 12 month time period. This move will not only incentivise the regular loan payment but also help small businesses to brace the disruption caused because of covid-19.

Important Details on Pradhan Mantri MUDRA Yojana

The PMO further said, "The scheme will be extended to loans which meet the following criteria - outstanding as on 31st March, 2020 & not in Non-Performing Asset (NPA) category, according to Reserve Bank of India guidelines, on 31st March 2020 and during the period of operation of the Scheme."

It is to be noted that the interest subvention would be payable for the months in which the accounts are not in NPA category including for the months that the account becomes a performing asset again, after turning NPA. This scheme will incentivize those people who will make regular repayments of loans. The estimated cost of the Scheme would be around Rs 1,542 crore which would be given by the Government of India.

Rs 15,000 Crore Fund for Dairy, Poultry & Meat Processing

In the meeting, cabinet has also approved Rs 15,000 crore infrastructure fund to promote dairy, poultry and meat processing, establishment of Animal Husbandry Infrastructure Development Fund where the Modi Government will provide 3% interest subvention to eligible beneficiaries.

Another good news is that the Modi Govt has also decided to bring 1,540 cooperative banks under RBI's supervision that will give surety to over 8.6 crore depositors in these banks that their money amounting to Rs 4.84 lakh crore will stay safe.