Canara Bank is one of the largest public sector banks that provides financial and banking products and solutions to its customers. Besides providing credit or funding solutions, it provides Mudra loans to Micro, Small and Medium Enterprises (MSMEs). These enterprises must be non-agricultural and non-corporate businesses that are engaged in the service, trade, or manufacturing sectors. The loan amount can be used to meet the business’s capital requirements for modernization, business expansion and other business-related activities.
Canara Bank Mudra Loan – Interest Rate 2020
|Canara Bank Mudra Loan 2020|
|Maximum Loan Amount||Rs. 10.00 Lakh|
|Collateral or Security||Not Required|
|Processing Fee||Up to Rs. 5.00 Lakh – Nil|
Above Rs. 5.00 Lakh – Rs. 500 onwards
|Interest Rate||Based on MCLR & MSME interest rates|
|Tenure||Min. 5 years – Max. 7 years|
Note: The mentioned interest rates, fees and charges are subject to change and depend on the sole discretion of the bank and RBI. GST and service tax shall be levied extra on the mentioned charges.
Canara Bank Mudra Loan – Eligibility
To avail Canara Bank Mudra Loan applicant must meet the following eligibility criteria:
- Applicant must have a good relationship with the bank for the previous 2 years
- Applicant’s business must be running profitably for the last 2 years
- Applicants who have accounts with other banks can also apply, as long as they meet Other Party Liability criteria set by Canara Bank
- Individuals, proprietors, partners and Self Help Groups can apply
- Private limited company, Hindu Undivided Family (HUF) and Trusts are not eligible
- Businesses judged at high risk are also not eligible
Calculate your Monthly EMI on – Business Loan EMI Calculator
Canara Bank Mudra Loan - Categories
Canara Bank offers three types of Mudra loan which are divided on the basis of loan amount offered. The scheme name and amount offered is given below:
|Mudra Loan Scheme||Amount|
|Shishu||Up to Rs. 50,000|
|Kishore||Between Rs. 50,000 & Rs. 5.00 Lakh|
|Tarun||Between Rs. 5.00 Lakh & 10.00 Lakh|
Shishu scheme of Canara Bank Mudra Loan is for those applicants who want to avail loans up to Rs. 50,000. This amount is beneficial to customers who want to start a new business.
Kishore scheme can be availed by those customers who need a loan amount over Rs. 50,000 but less than Rs. 5 lakh. It’s perfect for those businesses that have already been established but want to expand. The money can be used to hire staff, purchase equipment and so on.
Tarun scheme allows customers to apply for the maximum loan amount offered under Mudra Loan which is Rs. 10 lakh. This allows the customer to expand their business quickly by meeting all the demands of a growing business.
Canara Bank Mudra Loan – Tenure
Canara Bank Mudra Loan must be repaid within 5 to 7 years through EMIs. Also, the bank may grant a repayment holiday of 2 to 3 months, if it sees fit.
The following documents are required to apply for any Canara Bank Mudra Loan scheme:
- Identity Proof – Driver license, PAN Card, Aadhar card, passport and the like
- Residence Proof – Electricity bill, property tax receipts, Voter ID card, municipality certified document and so forth
- Photograph – Passport sized – 2 copies, not older than 6 months
- Proof of SC/ST, OBC or any minority group, if applicable
- Business Address Proof – Present
- Bank Statement of last 6 months
- Quotation of equipment that is to be purchased
Additional documents required for Kishore and Tarun schemes are:
- Sales Documents – Details of transactions and business activities of current financial year
- Financial Documents – Balance sheets, tax returns, and projected balance sheets
- Asset and Liability Statements
- Memorandum and Partnership deeds
Canara Bank Mudra Loan – Overview
Canara Bank is one of the financial institutions that follow the mandatory Pradhan Mantri Mudra Yojna (PMMY) scheme. The scheme was launched to provide funds to the non-funded, Non Corporate Small Business Sectors (NCSBSs). The government recognizes the value that this sector holds for India’s economy since they help drive large local and international value chains. The gross value addition of this sector to the Indian economy alone is Rs. 6.28 lakh crore annually.
Seeing how such small businesses are essential to India’s economy, the government decided to provide financial aid to this sector. This scheme aims to help business owners start a new venture or expand their current businesses. Do note that this Mudra Loan scheme is available to those businesses that are in service, trade and manufacturing sectors. Also, mudra loan can be availed by those individuals that are in non-farm based agriculture sector. For instance, Mudra Loan can be availed by those applicants that are in fish farming, poultry raising, dairy, beekeeping business and many more.
Canara Bank Mudra Loan – FAQs
Q. Who can apply for Canara Bank Mudra Loan?
Applicants must be an Indian citizen who runs a business or wants to establish a business in the MSME sector. Moreover, applicants must be engaged in manufacturing, service, trade, or agricultural activities other than farming.
Q. What is Mudra Card?
Mudra Card is designed to offer convenience to the borrower. Through this card, the borrower can use the working capital loan amount as cash credit. This will greatly help the borrower manage their working capital limit efficiently and keep the interest burden at a minimum. Also, by using the Mudra card the borrower can keep track of their transactions.
Q. What is MUDRA?
MUDRA (Micro Units Development and Refinance Agency) works as a financial entity to develop and refinance financial intermediaries like banks, Non-Banking Financial Companies (NBFCs), Micro Finance Institutions who lend to MSME enterprises involved in manufacturing, trading and services sector, including non-farm based agricultural activities.