Hyderabad: Though the Reserve Bank of India has cautioned governments about the spike in Non-Performing Assets (NPA) on loans given under the Pradhan Mantri Mudra Yojana (PMMY), Telangana sanctioned loans to 5.56 lakh people under the scheme in the past year.
According to the provisional data for 2018-2019 from PMMY, Rs 4,052.60 crore has been sanctioned so far as against Rs 6,545.26 crore in 2017-2018.
An official of the bank, speaking on condition of anonymity, noted that the percentage of NPAs on loans in the range of Rs 5 to Rs 10 lakh is less in Telangana. However, the percentage of NPAs is higher for loans of smaller amounts, from Rs 50,000 to Rs 5 lakh.
Launched on April 8, 2015, the PMMY requires banks to finance micro and small entrepreneurs under three categories, namely Shishu (up to Rs 50,000), Kishore (Rs 50,001-Rs 5 lakh) and Tarun (between Rs 5,00,001 and Rs 10 lakh). Explaining the low percentage in the Tarun category, the bank official said, “When a loan of `5 to `10 lakh is given, an asset is created. Because of this, the entrepreneur will continue the business irrespective of profits and losses. When it comes to small category loans, assets are not created so percentage of NPAs is high especially in the Shishu category.”
The State Level Bankers Committee is yet to come out with figures on NPAs due to Mudra loans. But of the 5.56 lakh beneficiaries of PMMY in Telangana state, 5.4 lakh have availed loans under Rs 50,000 to Rs 5 lakh. Banks in Telangana state are expected to see a significant increase in NPAs as the state went beyond target and granted loans last year.
P. Venkatramaiah, general secretary of the Bank Employees’ Federation of India for Andhra Pradesh and Telangana, said, “It is a common phenomenon and NPAs due to Mudra loans will be a huge pain for banks in the state. These loans were all given with a political motive. For instance, in Hyderabad, a politician gave a list of 100 loans to branch manager. Everywhere, politicians pressurised branch managers, citing their proximity to central ministers. It has become a political gimmick for which the banks have to face the heat. These politically backed loans will definitely contribute to NPAs in future. Banks are yet to declare the NPAs for about two or three months.”