Prime Minister Narendra Modi is set to launch the Rs 20,000-crore Micro Units Development and Refinance Agency (Mudra) Bank in a mega function on April 8, much like the launch of Pradhan Mantri Jan Dhan Yojana (PMJDY). The bank would provide institutional finance to micro entrepreneurs, while acting as a regulator for the microfinance institutions.
The setting up of the bank was proposed by finance minister Arun Jaitley in the Union Budget this year.
Sources said that the idea to launch the bank in a mega way is to create awareness among the end consumers. While the contours of the bank would be decided in the next two weeks, targets are likely to be set much like the PMJDY.
“Mudra will help in providing loans even to those who do not qualify as micro, small and medium enterprises…a loan of Rs 5 lakh or Rs 10 lakh required to set up a small business would be made available,” a senior government official who did not wish to be identified told HT.
According to official data, there are about 57.7 million small business units, mostly individual proprietorship, which run small manufacturing, trading or services businesses. Of this, 62% are owned by scheduled castes and tribes and other backward castes.
“This bottom-of-the-pyramid, hard-working entrepreneurs find it difficult, if not impossible, to access formal systems of credit. Towards this direction, a major initiative has been announced in the recent budget in the name Mudra Bank,” a government statement said on Wednesday.
The initial corpus which has been earmarked for the bank is Rs 20,000 crore.
“I propose to create a micro units development refinance agency, Mudra Bank, with a corpus of Rs 20,000 crore and credit guarantee corpus of Rs 3,000 crore,” Jaitley said while presenting the Union Budget 2015-16
Natural calamities: RBI issues loan restructuring norms for banks -Hindu Business Line
Mumbai, March 25:
A bank run by beggars, for beggars in Bihar town-Times of India 29.03.2015GAYA (Bihar): A group of beggars in this Bihar town has opened their own bank, which they run and manage to provide financial security in times of crisis.
Dozens of beggars, who have been depending for their survival on alms from hundreds of Hindu devotees at the gate of 'Maa Manglagauri Mandir' (temple) in Gaya town for years, have started the bank.
The beggars call it Mangala Bank.
"It is true that we have established a bank for ourselves," said Raj Kumar Manjhi, one of the 40 beggars who are members of this unique "bank".
"Bank's manager, treasurer and secretary along with one agent and other member, who are running and managing it, are all beggars," Manjhi told IANS in Gaya, about 100 km from here. Manjhi, incidentally, is the manager of the bank.
Manjhi, who is literate enough to manage the accounts and other works of the bank, said: "Each of us (beggars) deposits Rs.20 every Tuesday in the bank that comes to Rs.800 weekly deposit."
Malti Devi, who is secretary of the bank that was established six months ago, said: "It began last year with a big hope and to fulfill aspirations of beggars. We are still not treated well in the society because we are poorest of the poor."
Malti now reaches out to more and more beggars by opening their account.
"Most of the beggars who are members of the 'bank' have neither BPL (Below Poverty Line) card nor Aadhaar card," she said.
Manjhi's wife Nagina Devi is treasurer of the bank. She said: "My duty is to manage the deposit money."
Bank's agent Vanarik Paswan said his job is to collect money from each member weekly for deposit.
Manjhi said their bank helped him when he faced an emergency.
"Early this month, my daughter and sister sustained burn injuries while cooking. The bank has provided me a loan of Rs.8,000 for their medical treatment. It is an example of how the bank can help a beggar like me without any paper work or guarantor as practiced in nationalised and private banks," he said.
Manjhi would not have to pay interest on his loan for a month.
"The bank has made it mandatory to pay interest on a loan at the rate of 2 to 5 percent from next month to put pressure to pay back loan amount," Malti said.
Beggars like Nathun Budha, Basant Manjhi, Rita Masomat, Dhaula Devi said that they were happy that at least now they have their own bank.
"We saved some money at least now and deposit in the bank," said Basant.
Rita said they have been depositing money in the bank to meet her future needs.
Nathun added that what was unique about their bank is the fact that it is owned and managed by beggars who decide on the rules and regulations themselves.
The beggars were encouraged to start their own bank by officials of State Society for Ultra Poor and Social Welfare last year.
Media Bashing of Bankers Must Stop : Every Year Media Makes a Hue and Cry for Bank Holidays - It is a Shame on Media that They Misrepresent Facts-By Rajesh Goyal (source: allbankingsolutions.com)
The recent trends indicate that media is always trying to pick up one or the other issue and tries to paint the banks and bankers as the villain. The feelings of the general public [who is already biased against bankers. on account of wrong perceptions like high salaries, frequent strikes calls, most of which are called off, poor services], are aroused by media by placing distorted facts about Indian banking.
Date When it is a Holiday in some States / UTs
Out of 36 States+ UTs, only following States /UTs will observe bank holidays
28th March, 2015
Bihar, Daman & Diu, HP, Jharkhand, Maharashtra, MP, Orissa, Punjab, Sikkim, UP, Uttarakhand
29th March, 2015
SUNDAY - It is holiday as per law and available across all sectors
30th March, 2015
Banks to Remain Open Across India
31st March , 2015
Banks to Remain Open Across India
1st April, 2015
Bank Closing (It is mandatory for banks to close their accounts). Unlike other Govt offices, where they keep on issuing cheques in back dates and close their accounts at their will, banks are compulsorily required to close their books as on 31st March every year by next day i.e. 1st April.
2nd April, 2015 & 3rd April 20145
Jharkhand, Karnataka, Maharashtra, Tamil Nadu and UP, Chandigarh, Daman & Diu
RBI for tighter bank exposure norms
At present, banks can lend up to 15 per cent of their net worth to a single borrower and there's an additional five per cent leeway for firms involved in infrastructure development. The additional five per cent leeway is given to the banks' board. So, in effect, the total single company exposure of a bank could go up to 25 per cent of its net worth. Similarly, group exposure is capped at 55 per cent of the net worth of a bank.
"Under the proposed LE (large exposure) Framework, the sum of all the exposure values of a bank to a single counter-party or to a group of connected counter-parties must not be higher than 25 per cent of the bank's available eligible capital base at all times," RBI said in the 'Discussion Paper on Large Exposures Framework and Enhancing Credit Supply through Market Mechanism', released on its website on Friday.
Under the proposed LE framework, banks will get additional headroom for taking exposures towards single-name counter-parties. However, the exposure ceilings toward groups of borrowers will be significantly reduced in comparison with the present exposure ceilings.
The central bank said the new norms would come into effect from 1 April, 2019.
"A group of connected counter-parties will be identified on the basis of 'control' as well as 'economic interdependence' criteria against only 'control' criteria under the extant RBI exposure norms," it said.
Currently, banks are allowed group exposure of up to 55 per cent of their capital funds. However, the discussion paper noted that a study of 20 largest group exposures of 10 largest banks showed that the average group exposure of banks is only 10.60 percent of the capital funds.
The discussion paper highlighted the need for companies to rely more on market borrowings such as commercial paper and corporate bonds to meet their working capital needs rather than looking for bank funding.
"The discussion paper also invites comments on a proposal to make large corporates, enjoying working capital and term loan limits above a certain threshold, to meet a portion of both their short term and long term funding needs through the market mechanism such as Commercial Papers and Corporate Bonds," it said.
The paper noted that banks should avoid taking any additional exposure in cases where their exposure is above the exposure limit prescribed under this new framework.
The bank board has been advised to devise a smooth, non-disruptive transition plan for existing exposures which are currently in excess of the proposed LE limit.
"Such transition may be by way of either reducing the exposure or by increasing the eligible capital base or both," the paper said.