ABSTRACT
In 1991 with the support and efforts of Dr. P.V. Narsimha Rao and Dr. Manmohan Singh economic liberalization was initiated in India. The main purpose of liberalization was expansion in investment and industrialization. As an effect of liberalization, the Indian banking industry become more cautious while disbursing loans to its borrowers and started to take precautionary majors for not converting assets into Non-Performing Assets. In 2015 Prime Minister Shri Narendra Modi introduced Mudra Loan Concept under the flagship of the PMMY scheme to support non-agriculture/non-farm activities. The banks that disburse these loans are called Mudra Banks. These banks provide loans up to Rs. 10,00,000/- without any collateral security. Therefore, the chances of increasing Non-Performing Assets are at a high level. The study highlighted the reasons for increasing NPA concerning selective Mudra banks and also corrective majors or efforts to be taken by the Mudra banks to minimize the amount of NPA. NPA adversely affects the bank's financial solvency, profitability, and liquidity. NPA stops the income-generating source for the bank. The study analyzed the position of Gross Non-Performing Asset and Net Non-Performing Asset before and after covid-19 Pandemics crises concerning Mudra Banks. The study concluded that the repayment capacity of mudra loan borrowers is at a high level than any other loan borrowers also there is not much effect of the covid-19 pandemic on the repayment of mudra loans as they stood at the same place before and after the covid-19 pandemic crisis. Copyright © 2022 Wolters Kluwer Medknow Publications. All rights reserved.