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BJP’s Amit Malviya Slams Ex-RBI Guv Rajan Over Below-Average Mudra Loan NPAs

BJP’s Amit Malviya shared a report on Monday saying banks’ non-performing assets (NPAs) for Mudra loans were lower than the seven-year average.

Malviya shared a screenshot of a report from the Indian Expresspublished on Monday, which said loan NPAs under the Pradhan Mantri Mudra Yojana were lower than the industry average NPAs at 3.38 percent over the past seven years.

He also posted a screenshot of a 2018 article quoting Rajan as saying that loans under the Mudra scheme should be “closely scrutinized” for potential credit risk.

“If the country’s leader understands behavioral economics better, economists can,” Malviya wrote.

“When Prime Minister Modi launched Mudra loans, ‘leading’ economists like Raghuram Rajan warned against NPAs. 7 years later, Mudra’s NPAs are lower than the banking industry average.

“PM trusted the poor,” he said.

The Indian Express report said bad loans under the Mudra scheme for all banks – public, private, foreign, state co-operative, regional rural and small financial institutions – since its launch in April 2015 to June 2022 amounted to Rs 46,053.39 crore, which is Rs 3.38 per cent of total disbursements of Rs 13.64 lakh crore under the scheme during the period.

This was also half of the banking sector as a whole, which was 5.97 percent for the year ended March 31, 2022, it said.

Micro Units Development & Refinance Agency or MUDRA was launched in April 2015 by Prime Minister Modi. Under the Pradhan Mantri Mudra Yojana, loans of up to Rs 10 lakh were to be made to non-business and non-agricultural small/micro enterprises.

Since the scheme was launched, many experts including Rajan had warned about the possibility of high NPAs.

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