India’s apex bank has raised red-flags on surging non-performing assets (NPAs) under the government's flagship Mudra scheme. The BJP government’s Pradhan Mantri Mudra Yojana (PMMY) aims to provide financial support to micro-enterprises in the country through collateral-free credit facilities.
According to sources in the Ministry of Finance, the Reserve Bank of India (RBI) has warned that the scheme might turn out to be the next big source of NPAs, the current plague of the Indian banking and lending sector.
The central bank has flagged that bad loans under PMMY have risen to Rs11,000cr.
As per PMMY’s annual report for 2017-18, total disbursements under the Mudra scheme stood at Rs2.46tn in FY2017-2018.
-With inputs from Agencies