RBI deputy guv M K Jain flags concerns over rising stress in Mudra loans

Banks need to focus on repayment capacity at the appraisal stage and "monitor the loans through the life cycle much more closely, said M K Jain

Reserve Bank of India (RBI) Deputy Governor M K Jain on Tuesday expressed concern about the rising bad debt level in Mudra loans.

Speaking at a SIDBI event on microfinance, Jain said with the growing mobilisation of financial services, banks must enhance the capabilities of borrowers so that individuals in the new income group could not merely avail the offered services but are also capable of demanding preferred products and service suitable to their needs and choices. 

“Mudra is a case in point. While such a massive push would have lifted many beneficiaries out of poverty, there have been some