Srinagar: J&K Bank has extended the central government’s relief in the form of interest subvention scheme to all its eligible MUDRA Shishu beneficiaries.
The relief forms part of the Government’s economic stimulus package under Atma Nirbhar Bharat wherein 2% interest subvention will be provided for a period of 12 months on repayment of Shishu Loan accounts that are not categorized as NPA’s as on March 31, 2020. However, the benefit of such subvention shall be passed on to the borrowers only when the interest on the loan amount is serviced regularly on monthly basis.
The scheme, the bank in a statement said, aims to alleviate financial stress for borrowers at the ‘bottom of the pyramid’ by reducing their cost of credit.
“The scheme will be in operation for 12 months. For borrowers who have availed moratorium under RBI’s Covid package, the scheme would take effect after the moratorium period for 12 months i.e. from September 01, 2020 till August 31, 2021. For other borrowers, the benefit of 2% subvention would begin with effect from June 01, 2020 till May 31, 2021”, the statement added.
Pertinently, Shishu Loan is one of the categories of Micro Units Development and Refinancing Agency (MUDRA) finance under Pradhan Mantri Mudra Yojana (PMMY), which covers loans up to Rs 50000. And the interest subvention scheme is meant to alleviate financial stress for small businesses that have been disrupted the most during Covid-induced lockdown severely impacting their capacity to pay EMIs.
The scheme will help provide relief to the tune of Rs 1500 crore to the eligible Mudra-Shishu loan payees and about 3 crore people across the country are likely to be benefited by the 2 percent interest subvention.
