Banks told to alert customers on frauds related to Mudra loans

economictimes.indiatimes.com:

banks to keep vigil and inform their customers of fraud in Mudra loans. The directive follows multiple instances of frauds related to Mudra loans which have come to light. There have been reports of several unsuspecting small loan seekers getting duped by fraudsters impersonating as facilitators of Mudra loans.

Banks have been told to freeze the accounts of such firms or individuals who are reported to have committed such fraud and initiate action with the local authorities concerned, said a government official, who did not wish to be identified. «Also, all necessary action needs to be taken to protect the interests of borrowers, including helping them get their money recovered,» he said. Lenders have been further advised to spread awareness by holding campaigns.

«We have asked lenders to display suitable advisory materials in their branches and through other means,» said the official. As per the latest available data, under Mudra loans till March 24, around ₹23.2 lakh crore has been sanctioned in 408.2 million loan accounts. About 68% of accounts under the scheme belong to women entrepreneurs, and 51% of accounts belong to entrepreneurs in the scheduled caste, scheduled tribe and other backward class categories.