MUDRA BANK Ltd .

And its FUNCTIONS

 SUBMITTED BY.
CHIRAG BHATIA(01)
MANIK PARMAR(02)
MBA (I&B)2 SEM.
BACKGROUND ABOUT THE BANK
MUDRA bank to be set up with $3.2
billion of capital to help micro
financing firms to lend more –should
help leverage up firms which account for
40 percent of india’s exports.
India’s small businesses employ more
than 106 million workers ,according to
government statistics ,in a country that
brings a million new workers into the
workforce every month.
About the bank
The Government of India proposal to
create a Micro Units Development Agency
(MUDRA)bank as a single regulator for
all types of entities in the
microfinance space is a positive for the
sector .
It is likely to bring in uniform
regulation and a code of conduct for
these entities .
This would facilitate the adoption of
responsible finance principles by all
lenders and in-turn help prevent issues
 MUDRA BANK
 Micro Units Development and Refinance Agency
Bank (or MUDRA Bank) is a public sector financial
institution in India. It provides loans at low rates to
micro finance institutions and non-banking
financial institutions which then provide credit to
MSME's. It was launched by Prime
Minister Narendra Modi on 8 April 2015.
 Mudra Bank stands for Micro Units Development
Refinance Agency (MUDRA). Also, Mudra, in  Hindi,
means currency.
 ORIGIN OF MUDRA BANK

 The formation of the agency was initially announced

in the 2015 Union budget of India in February 2015. It
was formally launched on 8 April.
 The MUDRA banks will be set up under the Pradhan
Mantri MUDRA Yojana scheme.
 A corpus of Rs 20,000 crore and a credit guarantee
corpus of Rs 3,000 crore. The launch was the
fulfillment of an announcement made earlier by the
Finance Minister Arun Jaitley in his FY 15-16 Budget
speech.
 MUDRA VISION

 “To be an integrated financial and support

services provider par excellence
benchmarked with global best practises and
standards for the bottom of the pyramid
universe for their comprehensive economic
and social development”.
 MISSION OF MUDRA BANK
(“Funding the Unfunded”)
 To create an inclusive, sustainable and value based
entrepreneurial culture, in collaboration with our
partner institutions in achieving economic success and
financial security.
 MUDRA Bank will be responsible for regulating as
well as refinancing of micro-finance institutions in
the business of landing to micro/small business
entities associated with manufacturing, trading
and service activities besides others
 ROLE OF MUDRA BANK

 MUDRA Bank will set the policy guidelines for

micro/small enterprise financing business.
 Registration, accreditation/rating and regulation of
MFI entities
 MUDRA bank will also offer right technology solutions
for the last mile and development of standardised set
of covenants concerned with last mile lending to micro
and small enterprises
 This bank will also formulate and establish a Credit
Guarantee scheme for offering guarantees to loans
being extended to micro businesses
 CONTINUED..
 It will aim to lower the cost of finance from Last Mile
Financiers to micro/small enterprises many of which
are in the informal sector
 It will result in GDP, growth and job creation from
provision of institutional finance to micro/small
enterprise units.
 It will also assist in creation of a good architecture of
Last Mile Credit Delivery to micro companies as per the
Pradhan Mantri Mudra Yojana.
CONTINUED..

 The main objectives of Mudra Bank are, to encourage

entrepreneurs and small business units to expand
their capabilities and operations, to reduce over
indebtedness and to provide formal system of credit
(finance). Agriculture & Self-employment will be the
focus areas of Mudra Bank.
 RESPONSIBILITIES OF MUDRA BANK
LTD.

Laying down policy guidelines for micro/small enterprise financing
business.

Registration and Regulation of MFI (Micro-Finance Institutions) entities.

Accreditation/rating of MFI entities.

To assist the lower income groups to develop and grow their small
businesses.

To help to provide access to Institutional Finance for Small Business Units
(SBU).

Formulating and running a credit guarantee scheme for providing
guarantees to the loans which are being extended to micro-enterprises.
CONTINUED..

 To give priority to SC/ST enterprises in lending.

 Increasing the access of finance to the un-banked
and to also bring down the cost of finance.
 MUDRA bank will also be responsible for regulating
and refinancing all micro-finance institutions (MFIs)
which are in the business of lending to micro or
small business entities engaged in manufacturing,
trading and services activities.
WHY MUDRA BANK IS A MAJOR
LANDMARK IN OUR GROWTH PROCESS?
 The announcement of creating the Mudra Bank
has been welcomed by small and non-corporate
businesses since it is a serious attempt by the
government to facilitate “funding the unfunded”.
 The Government has proposed to set up a Micro
Units Development and Refinance
Agency(MUDRA)Bank through a statutory
enactment.This bank would be rsponsible for
regulating and refinancing all micro finance
institutions which are in business of lending to
 micro a small business entities engaged in
manufacturing ,trading and services
activities.
 The bank would partner with state /regional
level co-ordinators to provide finance to last
mile financer of small/micro business
enterprises.
 A sum of Rs 20,000crore (Rs 200 billion)would
be allocated to the MUDRA Bank from the
money available from shortfalls of priority
sector lending for creating a refinance fund to
provide refinance to the last mile financers .
 Another Rs 3,000 cr. would be provided to the
MUDRA Bank from the Budget to create a
credit guarantee corpus for guaranteeing
loans being provided to the micro enterprises.
RATE OF INTEREST CHARGED BY
MUDRA?
 MUDRA is a refinancing agency which will
extend its funds to LAST Mile Financers to
enable them to reach out to the sector
.Access to finance in cojuction with rational
price is going to e the unique customer value
proposition of MUDRA.
 It will use a variety of innovaitve financing
means including technology to bring down
the cost of funding for the ultimate borrower.
OFFERINGS OF MUDRA AND HOW
IT WILL FUNCTION?
 Under the aegis of Pradhan Mantri MUDRA
Yojana(PMMY),MUDRA has already created
its intial products/schemes. The intervention
hve been named (Sishu ) (Kishor)
and(Tarun)to signify the stage of growth
/development and funding needs of he
beneficiary micro unit /entrepreneur and also
to provide a reference point for the next phase
of graduation /growth to look forward to.
OFFERINGS CONT...

 The financial limit of these schemes are-

 A . Shishu : covering loans upto Rs 50,000/-
 B. Kishor : covering loans above Rs 50,000/-
and upto Rs 5 lakh.
 C. Tarun : covering loans above Rs 5 lakh to Rs
10 lakh.
OFFERINGS CONT...

 MUDRA’S delivery channel is conceived to be

through the route of refinance primarily to
Banks /NBFC /MFI’S.
 At the same time there is a need to develop and
expand the delivery channel at the ground level
in this context ,there is already in existence ,a
large number of ‘Last Mile Financiers ‘in the
form of companies ,trusts ,societies
,associations and other networks which are
providing informal finance to small business
THANKYOU....