Federal bank is one of the leading commercial bank that offers Mudra loans to its customers, besides specialising in providing banking and financial products. Under Pradhan Mantri MUDRA Yojana (PMMY), Government of India launched MUDRA loan to provide funding to banks and NBFCs for them to further lend it to Micro, Small and Medium Enterprises (MSMEs).
Banks that are eligible to provide the Mudra Loan are Commercial Banks, Small Finance Banks, Cooperative Banks, Regional Rural Banks (RRBs), Non-banking Financial Companies (NBFCs) and Micro Finance Institutions (MFIs). Individual willing to avail Mudra Loan can apply to Federal Bank online through the portal. Furthermore, enterprises that are involved in the agricultural or its allied activities can .
Federal Bank Mudra Loan Categories
Following are the categories offered by the Federal Bank with respect to MUDRA Loan:
- Shishu: Loan is provided up to an amount not exceeding Rs. 50,000 to start up business
- Kishore: Loan exceeding Rs. 50000 and up to Rs. 5 lakh is provided to businesses who have already commenced the business but are seeking for financial aid to establish the business
- Tarun: Loan exceeding Rs. 5 lakh and maximum up to Rs. 10 lakh is provided. This category covers those businesses that are already established but require financial aid for expanding the business
Mudra Loan Eligibility for Federal Bank
In order to avail the Mudra Loan of Federal Bank, the below mentioned eligibility must be fulfilled
- The person applying for the Mudra Loan must be an Indian Citizen above 18 years old
- Non-farm enterprises shall be eligible, if they come under Micro Enterprises and Small Enterprises segment
- Agriculture, as well as its allied activities has been categorized to be eligible to avail Mudra Loan under PMMY
- The person applying should be involved in the income generating activities
- The activities that the applicant should engage, should be manufacturing, trading or services
- The credit need required under eligibility is maximum up to Rs. 10 lakh
The applicant borrowing under Pradhan Mantri Mudra Yojana can be any individual which includes women, partnership firms, proprietorship, limited liability partnerships or association of persons
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Federal Bank Mudra Loan – Interest Rate
The Federal Bank in particular charge nominal amount of interest rate on Mudra Loan. Moreover, the interest rate so prescribed varies from time to time which is basically liked to bank’s Marginal Cost Lending Rate (MCLR).
Security/Collateral for Mudra Loan
Primary Security: Under primary Security, the security should be the assets that are basically created out of the Bank’s finance. In addition to the assets created out of Bank’s finance, personal guarantee of promoters, as well as directors must also be provided.
Collateral Security: At present there has been no specification mentioned about collateral security. Hence, there is no requirement of collateral security.
Also Read: How to get a collateral-free Business loan?
Mudra Loan Tenure: In terms of cash credit or overdraft, it is repayable on demand which is as per the guidelines of the Bank. Moreover there is no requirement of third party guarantee. The bank may charge fee if the internal guidelines so require. Moreover the processing charges in terms of Shishu loans are waived off mostly by all the banks that are eligible to provide the Pradhan Mantri Mudra Yojana.
- Proof of Identity: Voter’s ID which should be self-certified or driving license, Aadhar card or passport
- Address Proof: Electricity bill, telephone bill, property tax receipt which should not be older than two months
- Proof of SC/ST/OBC minority, if the applicant falls into that category
- Applicant should not have defaulted in the repayment to any bank or NBFC
- Applicant should also provide proof of identity, as well as copies of registration, relevant licenses and relevant certificates for ownership, identity and address of the business unit
- Statement of accounts of the previous 6 months from the existing banker
- Balance sheets of the previous 2 years with income tax return which is applicable in cases if the amount of loan is 2 Lakh or above as well as projected balance sheet
- Memorandum as well as Articles of Association of the company or partnership deed of partners, etc.
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Frequently Asked Questions
Ques. Who are eligible to avail the Mudra Loan?
Ans. The main aim of incorporating the Pradhan Mantri Mudra Loan Yojana is to fund the unfunded. Therefore businessmen who are in need of finance aid to establish or expand the business can avail the Mudra Loan.
Ques. Is it necessary to provide the collateral for availing the Mudra loan?
Ans. At present, there is no requirement to provide the collateral for availing the Mudra loan. Hence there is no need to collateral.
Ques. What is usually the interest rate?
Ans. The Bank charges nominal interest rate usually which varies from time to time.