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23rd September Part-3: Daily News Analysis
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Rishab Arora
Graduate in Economics. Gold medal in Dissertation, Prepared various documents on Demonetisation and GST, Share-trading and many more

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mam phrasal verb open nhi ho rha hai
  1. Is repayment a challenge?' Critics of the scheme say that too many best practices in loan origination have been neglected while authorising and disbursing loans. Earlier this year, the CBI registered a case against a former official of Punjab National Bank for alleged abuse of official position in sanctioning and disbursing 26 Mudra loans amounting to 65 lakh. * Even if loans are sought by business owners genuinely seeking growth and bankers disburse them with an eye on economic development, ensuring repayment is still a challenge. First, these loans are unsecured - a collateral that could protect the interests of the bank is not required, unless an asset that is purchased can itself serve as collateral. The scheme is meant for those who need small amounts, but do not have access to such funds, but the very nature of the business of such borrowers is susceptible to volatility and annual cycles, not to mention the itinerant ways of some business owners, such as vegetable vendors. They may choose one location for their place of business on a day, and another elsewhere in their city the next day. Further, the public banking system may not be staffed for work this may entail. When it comes to collection, bank staff may choose to go after one loan with outstanding of 10 lakh, for example, rather than 10 loans of 1,00,000 each


  2. What is the average loan size? Loans under the Mudra scheme are disbursed under three heads, starting from loans up to #50,000 and going up to 10 lakh. About 32.53 lakh crore had been sanctioned for about 4.81 crore PMMY loans under all three heads in the financial year 2017-18. The average size of a sanctioned loan stood at Rs. 52,706 for the year. The State Bank of India recently said it had disbursed Rs. 28,556 crore under the PMMY scheme in FY18. Non-performing assets arising out of this scheme is about 5.2% for India's largest bank, a figure that the bank views as being under 'acceptable limits' The website dedicated to PMMY does not indicate the quantum of loans that have soured or details of collections. In May, the government said a total of 76 lakh crore had been disbursed to 12 crore beneficiaries under the Mudra scheme since its inception in 2015. Of these, 3.25 crore were first-time entrepreneurs and 9 crore borrowers were women