Explanation:

MUDRA Bank
Micro Units Development and Refinance Agency Bank (or MUDRA Bank) is a public sector financial institution in India. It provides loans at low rates to micro-finance institutions and non-banking financial institutions which then provide credit to MSMEs.
The MUDRA banks were set up under the Pradhan Mantri MUDRA Yojana scheme. It will provide its services to small entrepreneurs outside the service area of regular banks, by using last mile agents. About 5.77 crore (57.6 million) small business have been identified as target clients using the NSSO survey of 2013. Only 4% of these businesses get finance from regular banks. The bank will also ensure that its clients do not fall into indebtedness and will lend responsibly.
The bank will have an initial capital of ?200 billion (US$3.1 billion) and a credit guarantee fund of ?30 billion (US$460 million). The bank will initially function as a non-banking financial company and a subsidiary of the Small Industries Development Bank of India (SIDBI). Later, it will be made into a separate company. However, it will regulate Micro Finance institutions.
The bank will classify its clients into three categories and the maximum allowed loan sums will be based on the category:
•Shishu: Allowed loans up to ?50,000 (US$770)•Kishore: Allowed loans up to ?5 lakh (US$7,700)•Tarun: Allowed loans up to ?10 lakh (US$15,000)
Government has decided to provide an additional fund of ?1 trillion (US$15 billion) to the market and will be allocated as
•40% to shishu•35% to kishor•25% to Tarun
Those eligible to borrow from MUDRA bank are
•Small manufacturing unit•Shopkeepers•Fruit and vegetable vendors•Artisans