PNB Cash Credit Scheme for Weavers from PNB

On the eve of ''National Handloom Day'', Punjab National Bank (PNB) has launched a scheme to facilitate cash credit or loans to weavers against their credit requirements.

Under the PNB Weaver Mudra Scheme (PNBWMS), the bank has launched a credit card plan under which loans up to Rs 2 lakh to weavers will be granted as per the scheme of the Ministry of Textiles.

''The scheme aims to provide adequate and timely assistance to weavers – for a maximum of upto Rs 5 lakh per borrower, by way of Cash Credit or loan - for their credit requirements such as investments and working capital flexibly and cost-effectively, in both rural and urban areas,'' the bank said in a statement.

"With the introduction of MUDRA loan under the PM Mudra Yojana, the Ministry of Textiles wanted options for working capital needs of weavers under ''Shishu'' and ''Kishore'' Category along with the issue of MUDRA card hence the PNBWMS," it added.

Prepared after a detailed discussion with the Ministry of Textile, the new product specifically seeks to finance working capital needs of weavers (up to Rs 50,000 to be categorised under Shishu and for above Rs 50,000 and up to Rs 5 lakh to be categorised under Kishore category), where the Government of India has agreed to extend financial assistance in respect of margin money subsidy, interest subsidy and credit guarantee fees, it said.

As per the margin conditions, it said, the government will bear a margin of 20 per cent of the cost of the project (working capital) with a maximum of Rs 10,000, while the rest of the amount will have to be borne by the borrower.

''Margin money subsidy will be credited to the account of the borrower after sanctioning of the loan,'' it added.

All these accounts will be covered under the credit guarantee schemes of credit guarantee corporations.