The Small Industries Development Bank of India (SIDBI) has asked banks and other member lending institutions (MLIs) to ensure release of interest subvention amounts to the borrowers.

All MLIs should also inform their borrowers about the interest subvention scheme and its benefits, it said in a circular.

The Centre had earlier announced interest subvention of 2 per cent for a period of 12 months as part of the ‘Atmanirbhar Bharat Abhiyan’ economic relief package in wake of the Covid-19 pandemic.

The Department of Financial Services, Ministry of Finance, has designated SIDBI as the Nodal Agency for implementation of the scheme.

Detailing the operational guidelines of the scheme, SIDBI said MLIs should route their claims for the amounts through nodal officers appointed for Pradhan Mantri Mudra Yojana (PMMY).

As per the guidelines of the scheme, all small business loans of up to ₹50,000 availed under the Sishu scheme of Mudra are eligible for interest subvention.

They should also be standard accounts in the books of the lending institutions as on March 31, 2020.

Apart from banks, regional rural banks, small finance banks, NBFC-investment and credit companies, NBFC-MFIs including societies and trusts that have submitted their performance and NPA data on this category of loans up to March 31, 2020, are eligible to stake their claims for refund from SIDBI.

Under PMMY, collateral-free loans are given under three categories — Shishu (up to ₹50,000), Kishore (₹50,000-₹5 lakh) and Tarun (₹10 lakh).

These loans are given by commercial banks, RRBs, small finance banks (SFBs), MFIs and NBFCs. Public sector banks, however, have been the major channels of distribution, with a lion’s share in the total disbursals since the beginning of the scheme.

The Sishu loans account for about 45 per cent of the total loans under Mudra. As on March 30, 2020, the total loans sanctioned under Mudra stood at ₹3,37,465 crore.

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