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MUDRA is a flagship scheme introduced by the Government of India to take last mile financial aid to the rural areas with underdeveloped banking facilities. MUDRA stands for Micro Units Development & Refinance Agency Ltd. This institution was set up with the core aim of providing credit facilities to deserving MSME units for development and refinancing activities relating to their business units.

To begin with, MUDRA has enrolled 27 Public Sector Banks, 17 Private Sector Banks, 27 Regional Rural Banks and 25 Micro Finance Institutions as partner institutions to channel support to the ultimate borrower based on eligibility criteria.

Central Bank of India is one of the partner banks, designated to disburse MUDRA loan to the deserved. Central bank of India is a Government-owned commercial bank that has been in the business of providing various financing schemes to the MSME sector. They have successfully sanctioned crores worth of loan amount under the MUDRA loan along with other banking products to its customers.

How does Central Bank of India operate the MUDRA loan for the benefit of deserving MSME units?

Central Bank Of India Mudra Loan

The Central Bank of India has instated a scheme called Cent MUDRA Loans to extend credit facilities under the erstwhile MUDRA Yojana. This facility is primarily available for Non–Corporate Small Business Segment (NCSB) comprising of millions of proprietorship or partnership firms running as Small Manufacturing Units, Service Sector Units, Shopkeepers, Fruits & Vegetable Vendors, Truck Operators, Food-service Units, Repair Shops, Machine Operators, Small Industries, Artisans, Food Processors and Others, in Rural and Urban Areas for credit facilities up to Rs.10 lakhs.

Key features of the MUDRA Loan offered by Central Bank of India

MUDRA loan is disbursed under 3 different categories. Applicants should apply in the relevant category based on the size of their business and the loan amount required

Shishu – Loans up to Rs.50000, with rate of interest being 1% per month or 12% per annum. Repayment period 5 - 7 years.

Kishore - Loans from Rs.50001 up to Rs.5 lakhs. The interest rate would depend on the lender, keeping the applicant's credit history in mind in compliance with the scheme guidelines. Repayment duration depends on the bank's discretion.

Tarun - Loans from Rs.5 lakhs to Rs.10 lakhs. The interest rate would depend on the lender, keeping the applicant's credit history in mind in compliance with the scheme guidelines. Repayment duration depends on the bank's discretion.

The loan can be availed without any collateral security or guarantor. 

No processing fees or other charges for loan processing

MUDRA Debit Card can be availed for instant cash to funds. 

The PMMY scheme will cover the overdraft facility extended to all eligible PMJDY beneficiaries.

Central Bank of India MUDRA Loans Interest Rates:

Interest Rates

  • Shishu: 10-12%
  • Kishor: 14-17%
  • Tarun: 16%

Repayment Tenure

1-5 years

Eligibility criteria to apply for MUDRA loans from Central Bank of India

As mentioned above, the MUDRA loan is primarily instated targeting Non –Corporate Small Business Segment (NCSBS). The Finance Minister reiterated that while the lending target were scaled up, the scheme would focus on women, backward classes, minorities, Dalits, and tribal who were not usually given the appropriate opportunity to get finances for their businesses.

The eligibility criteria for this loan is clearly stated by the Government. 

Shishu Loans

Eligible entitiesStart-ups looking for funding. The proposal report should include a viable business with the potential to generate productivity and jobs.
Loan amountUp to Rs.50,000 with rate of interest being 1% per month or 12% per annum. Repayment period up to 5 years

Kishor & Tarun Loans

Eligible entitiesEstablished businesses looking for expansion of existing business units. Purchase and upgradation of existing machinery and equipment. The proposal should include substantial proof on expected increase in the income and job generation through the proposed expansion or machinery purchase
Loan amountRs.50,000 up to Rs.10 lakhs. The interest rate would depend on the lender, keeping the applicant's credit history in mind in compliance with the scheme guidelines. Repayment duration depends on the bank's discretion

How to apply for MUDRA loans at Central Bank of India?

Anyone in India can take advantage of the Mudra loan by applying online on the website by selecting the nearest appropriate branch and visiting the nearest branch for manual submission of project relevant documents. You can visit the nearest branch of Central Bank of India and submit your duly filled application form with relevant forms for loan processing. Upon satisfactory documentation, sanction letter is issued for your enterprise. You can get the loan amount disbursed in your account directly.

Documentation required for loan processing:

Identification Documents

Passport, Aadhar Card, Driving Licence, Voter ID

Residential Address Proof

Power Bill, Gas Bill, Water Bill

KYC Documents

PAN card of the applicant

Recent passport size photographs(two)

Caste certificate (Only if applicable for special category concessions)

Business  Documents

Business License from the competent authority

GST Registration Certificate

Certificate from SSI(Small Scale Industries) registration (Only if applicable)

Registered or notarised agreement for Rental or ownership proof of the business premises

Income tax returns (Last three years)

Profit and Loss Account, Balance Sheet (Last three years)

Bank Statement of Current Account (Last 12 months)

An overview of loans under the Pradhan Mantri Mudra Yojana (PMMY) sanctioned by Central Bank of India, year wise, under all three categories since inception of the scheme is given here below:







F.Y 2015 - 16


No. of Sanctions





Amount sanctioned in Crores





F.Y 2016 - 17


No. of Sanctions





Amount sanctioned in Crores





F.Y 2017 - 18


No. of Sanctions





Amount sanctioned in Crores





F.Y 2018 - 19 (up to Aug 2018)


No. of Sanctions





Amount sanctioned in Crores





FAQs on MUDRA loans by Central Bank of India

1. I would like to set up a small business dealing in fruits & vegetables. Can I get a MUDRA loan?

Yes, you can apply for loans of up to Rs.50,000 under the 'Shishu' category of MUDRA loans and under the 'Kishor' category you can get amounts up to Rs.5 lakh. You can approach any of your nearest branch of Central Bank of India to avail this facility.

2. Can Central Bank of India reject my MUDRA loan application?

Since there is no collateral to be sought for MUDRA loan applicant to approve the loan, the banks may ask various clarifications and supporting documents to process the loan. If you have all the relevant documents and a strong proposal document, you can be assured of a loan. If the records are all in order, the banks have no right to reject a request. If the bank is still delaying processing of the loan, you can lodge a complaint in the consumer forum against them or file an RTI. There could be different requirement for the loan category and the loan amount you have opted for. Please visit the nearest branch of Central Bank of India to get the best interest rates and other loan offers.

3.Is MUDRA loan better than a personal loan?

Personal loan and MUDRA loan have similar terms & conditions; However, MUDRA loans are specifically offered to MSME units. Personal loans are also a viable option when you are in immediate need of funds for your business needs. One drawback with MUDRA loans is that it requires you to present a solid business plan while a personal loan does not ask you for any documentation regarding the end use of the funds. Weigh in your options, compare interest rates between different loan products before you apply for one.

4. What kind of assistance can I get for food processing units?

Food Processing is very much covered under one of the MUDRA schemes. Please contact your nearest MUDRA authorized lender to know more about the relevant scheme. You can avail assistance under MUDRA schemes as per your requirements. Please visit the nearest branch of Central Bank of India to get the best interest rates and other loan offers.

5. I heard that MUDRA loans give priority to women, Dalits and SC/ST. I am a woman who has completed Beauty Parlour training and would like to set up my own beauty parlour. Which category of MUDRA should I apply loan with?

The Mahila Uddyami Scheme is specially designed for women entrepreneurs and is covered under MUDRA. Under this scheme, women can avail assistance under all three groups, viz. 'Shishu', 'Kishor' and 'Tarun'. Please approach the nearest branch of Central Bank of India with your business proposal and supporting documents. They will let you know of the best interest rates and other offers to suit your needs.

End Note:

Mudra yojana is applicable throughout the country in both rural and urban sectors for their growth and development. Mudra loan is granted to any non-farm activities in manufacturing, trading or service sector within a maximum limit of Rs. 10 Lakh. Various public sector banks and NBFCs are authorized to offer loans under the Pradhan Mantri Mudra Yojana (PMMY). One has to diligently scrutinize loan products from different lenders to choose the one that gives them maximum benefits.

Central Bank Of India Mudra Loan - Customer Reviews

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