Recently, the central government decided to convert MUDRA Ltd, an NBFC, into MUDRA (SIDBI) Bank. With this reference, consider the following statements:
- MUDRA(SIDBI) Bank will be the regulator of the micro finance institutions in India.
- Banks and MFIs can draw refinance under the scheme only after becoming member lending institutions of MUDRA (SIDBI).
Which of the above statements is/are correct?
First statement is incorrect because MUDRA Bank will regulate banks only for the purpose of MUDRA loaning and RBI will regulate microfinance institutions in India. The MUDRA scheme provides refinance for three types of loans given by lending institutions – Shiatsu loans are up to Rs 50,000, Kishor loans are between Rs 50,001 and Rs 5 lakh and Tarun loans of Rs 5-10 lakhs.
This question is a part of GKToday's Integrated IAS General Studies Module