MUDRA Bank announced in the union budget this year has finally become a reality. It was launched by PM Modi on Wednesday. It will be functioning as a regulator for Micro-Finance Institutions and will serve as a credit provider to small entrepreneurs. The initial corpus is Rs. 20,000 crore.
MUDRA will play the role of laying down policy guidelines for the business of micro enterprise financing and registering MFI entities along with their rating and accreditation.
MUDRA Bank will be enumerating "responsible financing practices", whose will eliminate over indebtedness while ensuring proper principles of client protection and recovery methods.
It will also work to develop standards to govern last mile lending to micro enterprises.
The initial products and schemes of MUDRA will be known as Shishu , Kishor and Tarun signifying the level of development and need of funding for the beneficiary micro unit.
