AMN

Union Cabinet today approved a scheme for interest subvention of 2 per cent for a period of 12 months, to all Shishu loan accounts under Pradhan Mantri Mudra Yojana (PMMY) to eligible borrowers.

The scheme will be extended to loans which are not in Non-Performing Asset (NPA) category, as per Reserve Bank of India (RBI) guidelines as on 31st March 2020 and during the period of operation of the Scheme.

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.

The scheme will incentivize people who will make regular repayments of loans.

The estimated cost of the Scheme would be approximately Rs. 1,542 crore which would be provided by the Government of India.

This Scheme is for implementation of one of the measures relating to MSMEs, announced under the Atma Nirbhar Bharat Abhiyan.

Under PMMY, loans for income generating activities up to Rs. 50,000 rupees are termed as Shishu loans.

The Scheme will be implemented through the Small Industries Development Bank of India (SIDBI) and will be in operation for 12 months.