PM Modi launches MUDRA Bank

[doppelganger]

PM Modi launches MUDRA Bank, expected to benefit 5.77 crore micro-finance institutions in India

New Delhi: Prime Minister Narendra Modi on Wednesday launched MUDRA Bank under Pradhan Mantri Jan Dhan Yojana. This will provide credit of up to Rs 10 lakh to small entrepreneurs and act as a regulator for 'Micro-Finance Institutions' (MFIs).

"Big industrial houses provide jobs to only 1.25 crore people, while small entrepreneurs employ 12 crore people. MUDRA Bank aims to fund the unfunded small entrepreneurs; need to strengthen savings habit in the country," Modi said.

He announced higher compensation for crop damage and eased criteria for them to avail government support.

"Farmers are going through various problems due to seasonal calamities. We have told banks and insurance companies to provide help," he added.

The roles envisaged for MUDRA include laying down policy guidelines for micro enterprise financing business and registration of MFI entities as well as their accreditation and rating.

There are about 5.77 crore small business units. It will also lay down "responsible financing practices" to ward off over indebtedness and ensure proper client protection principles and methods of recovery, besides development of standardised set of covenants governing last mile lending to micro enterprises.

"Providing access to institutional finance to such micro/small business units/enterprises will not only help in improving the quality of life of these entrepreneurs but also turn them into strong instruments of GDP growth and employment generation," the Finance Ministry said in a statement.

In his Budget speech, Finance Minister Arun Jaitley had proposed the Micro Units Development Refinance Agency (MUDRA) with a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore.

"The initial products and schemes under this umbrella have already been created and the interventions have been named 'Shishu', 'Kishor' and 'Tarun' to signify the stage of growth/development and funding needs of the beneficiary micro unit/entrepreneur," the Ministry said.

Shishu would cover loans up to Rs 50,000 while Kishor above Rs 50,000 and up to Rs 5 lakh. Tarun category will cover loans of above Rs 5 lakh and upto Rs 10 lakh.

PM Modi launches MUDRA Bank, expected to benefit 5.77 crore micro-finance institutions in India - IBNLive

I saw most of his speech. He has really grown into his role as PM. More self assured. Calmer. Less thunderous. Definitely as convincing.

Mentioned Muslims many times. Making a point. Delved on his experiences as CM of Gujarat in his early day in 2003-2004, talking of the kite making cottage industry almost predominantly run by Muslim workers. How he helped a 36 crore industry grow in a leap to a 500 crore industry.

I felt good as an Indian today. 20,000 crore is nothing for our country really. And its impact is going to be reaped by crores of our countrymen who have skills and drive and ambition but lack funding and have to go to sharks.

Kudos to our PM. May he continue to drive our country forward. A very positive start to my day.

 

[doppelganger]

Following on the heels of the Jan Dhan Yojana, this is a great follow-on step.

Trust a Gujarati to undrstand the basic philosophy that money creates money.

 

[Dr. Sen]

Many here ignore articles like these and points towards one negetive 'news' about Modi and made a fus about it. News like these dont have a immediate wow factor and thus ignored. But these initiatives of Modi will make the future of our country bright! Because of many small steps like these an Indian 20 years ahead will have a good life.

 

[lasttry]

Following on the heels of the Jan Dhan Yojana, this is a great follow-on step.

Trust a Gujarati to undrstand the basic philosophy that money creates money.

If only the land bill also is passed, I dont think we need anymore reform for the next 5 years. We are almost there - autopilot. I also feel RR needs to have some more faith in the government. He actually used a special cause variation (unseasonal rains) to halt an expected cut in rates. i dare say thats not wise.

 

[IND151]

A good developement.

 

[doppelganger]

If only the land bill also is passed, I dont think we need anymore reform for the next 5 years. We are almost there - autopilot. I also feel RR needs to have some more faith in the government. He actually used a special cause variation (unseasonal rains) to halt an expected cut in rates. i dare say thats not wise.

I do not understand economics too much. But RR has a reason to be justifiably peeved no? He reduces rates and the major banks sit tight for months till he cracks a whip? What is this, high school?

 

[lasttry]

I do not understand economics too much. But RR has a reason to be justifiably peeved no? He reduces rates and the major banks sit tight for months till he cracks a whip? What is this, high school?

yea well ... yes but only to some extent. 50 basis points is not going to move the needle sir.

think about this. indian corporates pay close to 20% for short term capital and have to compete with the chinese who get short term capital at almost 0%. and this does not include inflation or rupee depreciation in case the borrowings are made in dollars.

we are practically at near zero inflation. ideally our PLR should be below 5% now, but....

 

[deckingraj]

I do not understand economics too much. But RR has a reason to be justifiably peeved no? He reduces rates and the major banks sit tight for months till he cracks a whip? What is this, high school?

no..he hasn't cracked any whip...Indian banking industry has lot of competition and thus they will be forced to reduce rates in order to stay competitive...it is true that financing cost that banks have to pay is not merely repo rate...however given repo rate has come down it is but obvious that interest rates will come to some weightage of repo rate reduction...

 

[doppelganger]

yea well ... yes but only to some extent. 50 basis points is not going to move the needle sir.

think about this. indian corporates pay close to 20% for short term capital and have to compete with the chinese who get short term capital at almost 0%. and this does not include inflation or rupee depreciation in case the borrowings are made in dollars.

we are practically at near zero inflation. ideally our PLR should be below 5% now, but....

I understoood some of that.

Problem with rejigging PLR in the short term to move with Inflation is that it hits savings and wealth creation of people's investments and savings right?

Most indices are linked to the PLR.

 

[deckingraj]

Many here ignore articles like these and points towards one negetive 'news' about Modi and made a fus about it. News like these dont have a immediate wow factor and thus ignored. But these initiatives of Modi will make the future of our country bright! Because of many small steps like these an Indian 20 years ahead will have a good life.

and why not...what is the fun in talking anything about a positive news...all you will say is good job...however when comes a negative news we have lot to say
bhagts chutapa is all here to watch these days!!

 

[doppelganger]

no..he hasn't cracked any whip...Indian banking industry has lot of competition and thus they will be forced to reduce rates in order to stay competitive...it is true that financing cost that banks have to pay is not merely repo rate...however given repo rate has come down it is but obvious that interest rates will come to some weightage of repo rate reduction...

I understand that the Reserve Bank cannot dictate terms to the private banks. But he did make his displeasure known prety clearly per today's reports. And no major bank is going to buck his office ......

Either way from the outside it looks to me like the major banks run some sort of cartel amongst each other. With a definite understanding on rates. Who will bell the cat first and then the others follow. Maybe the Reserve Bank should have some more say ?

 

[deckingraj]

I understand that the Reserve Bank cannot dictate terms to the private banks. But he did make his displeasure known prety clearly per today's reports. And no major bank is going to buck his office ......

actually they did ... yesterday they said(both private and public) that IR would come down however when is something that we will decide..

 

[kaykay]

A very good development. Millions of small businessmen will benefit from this in whole India.

 

[doppelganger]

actually they did ... yesterday they said(both private and public) that IR would come down however when is something that we will decide..

I added to my previous post.

 

[SuperSubrayan]

Many here ignore articles like these and points towards one negetive 'news' about Modi and made a fus about it. News like these dont have a immediate wow factor and thus ignored. But these initiatives of Modi will make the future of our country bright! Because of many small steps like these an Indian 20 years ahead will have a good life.

History will repeat itself . All those who create hallabulla on non issue to target our PM will pay the price. Take Gujrat ! Congress wiped out ! This trend is spreading all over the country . Because people are not illiterate anymore . All are highly educated and in fact very patriotic indeed. Great future for India to realise the power of being HINDUSTAN again !!!