Bank of Baroda Mudra Loan: Eligibility and How to Apply
Reviewed by: WeCredit Research Team
Bank of Baroda offers Mudra loans under the Pradhan Mantri Mudra Yojana (PMMY) of up to Rs 20 lakh for non-farm micro and small businesses. The bank’s own page lists no processing charges, no collateral and CGTMSE cover, and it takes applications at branches and through the Jansamarth digital route.
Quick answer: apply at a Bank of Baroda branch or through the bank’s Digital Mudra Loan link, with a filled Mudra application form, ID, address and business proof. Bank of Baroda decides the sanction, rate and margin. Existing customers can review their account through BOB net banking. WeCredit does not sanction government scheme loans, so confirm current terms with the bank.
Bank of Baroda Mudra Loan at a Glance
| Item | What the bank’s Mudra page says |
|---|---|
| Scheme | Pradhan Mantri Mudra Yojana (PMMY), a Government of India scheme for affordable credit to micro and small enterprises |
| Maximum loan | Rs 20 lakh, with no minimum loan amount |
| Processing fee | Nil for all categories |
| Collateral | No collateral; primary security is hypothecation of assets created by the bank’s finance |
| Guarantee | Covered under CGTMSE |
| Repayment | Term or demand loans up to 84 months with a suitable moratorium, subject to annual review; working capital for 12 months, subject to annual review |
| Pre-closure charges | Nil |
| Interest rate | Described only as applicable to the MSME sector; no fixed Mudra rate is published |
Loan Categories and Limits
| Category | Loan amount | Condition |
|---|---|---|
| Shishu | Up to Rs 50,000 | None beyond the bank’s eligibility |
| Kishore | Rs 50,001 up to Rs 5 lakh | None beyond the bank’s eligibility |
| Tarun | Rs 5,00,001 up to Rs 10 lakh | None beyond the bank’s eligibility |
| Tarun Plus | Rs 10,00,001 up to Rs 20 lakh | Only for those who have successfully repaid a Tarun loan |
The top category has its own rules on earlier repayment, which the Mudra Tarun Plus loan page explains for readers aiming above Rs 10 lakh.
Who Can Apply
The bank’s page lists these eligibility points:
- All non-farm enterprises in the micro and small enterprise segment
- Enterprises engaged in income-generating activity in manufacturing, trading or services
- Borrowers whose credit needs are up to Rs 20 lakh
- Allied agriculture activities such as horticulture and fisheries, which PMMY has included with effect from 1 April 2016
The bank applies a bureau score cut-off as per its own guidelines and sets the margin as per its guidelines. Neither figure is published, so ask the branch.
Documents Required
Bank of Baroda lists these documents on its Mudra page:
- Duly filled Mudra loan application form
- Identity proof for all applicants: Aadhaar, PAN, driving licence, passport, voter ID or another government-issued photo ID
- Residence proof for all applicants: latest utility bill, Aadhaar, voter ID, passport or bank account statement
- Business ID and address proof: Udyog Aadhar, licences, registration certificates or deed copy
- Latest photographs of the applicant or applicants
- Proof of SC, ST, OBC or minority status, if applicable
- Proof of the loan requirement, such as equipment quotations or vendor details
- Any other document as per sanction terms
Digital Route: Jansamarth and Digital Mudra Loan
The bank’s Apply Online page lists a Digital Mudra Loan, a separate Digital Mudra Loan for Shishu amounts up to Rs 50,000, and Jansamarth, all pointing to the bank’s Jansamarth application link. If your need is small, the Mudra Shishu loan overview explains what to expect in that band.
How to Apply for a Bank of Baroda Mudra Loan: Step by Step
- Work out the amount you need and which category it falls in.
- Collect the documents listed above, including quotations for any equipment you plan to buy.
- Download the Mudra application form from the bank’s forms page or collect it at a branch.
- Apply through the bank’s Apply Online page (Digital Mudra Loan or Jansamarth) or submit the form at your nearest branch. The bank also lists a business correspondent finder and a toll-free number, 1800 5700 1800 5000.
- The bank appraises the proposal and issues a sanction letter with the rate, margin and repayment terms.
- Check the sanction letter for the all-in rate, margin and repayment schedule, and confirm there is no processing charge, before you accept.
For other schemes you can reach through banks, visit the government loan schemes hub.
Worked Example: Rs 3 Lakh Equipment and Stock Term Loan
Suppose a small trader needs Rs 3,00,000 as a term loan to buy shop equipment and stock. This falls in the Kishore band, and the bank charges no processing fee. Bank of Baroda does not publish a Mudra rate, so assume 11% for illustration only.
Over 5 years (60 months), the EMI would be about Rs 6,523 and the total interest about Rs 91,000. The real rate, margin and tenure come from the sanction letter.
Is This Loan Right for You? Checklist
- Your business is non-farm, or an allied activity the scheme includes.
- Your total credit need is within Rs 20 lakh.
- You have an identity, address and business proof ready.
- You can show the use of funds with quotations or vendor details.
- For above Rs 10 lakh, you have repaid an earlier Tarun loan.
Why Applications Stall and What to Do
| Reason | What to do |
|---|---|
| Farm-based activity | Check whether it counts as an allied activity such as horticulture or fisheries |
| Missing business proof | Arrange Udyog Aadhar, a licence or registration certificate |
| No proof of loan requirement | Get equipment quotations or vendor details |
| Bureau score below the bank’s cut-off | Ask the branch for its cut-off and improve repayment history first |
| Tarun Plus without earlier repayment | Repay a Tarun loan before applying above Rs 10 lakh |
| Asking for more than Rs 20 lakh | Keep total credit need within the Rs 20 lakh ceiling |
Bank of Baroda vs PNB Mudra Terms
| Point | Bank of Baroda | Punjab National Bank |
|---|---|---|
| Maximum loan | Rs 20 lakh | Rs 20 lakh |
| Processing fee | Nil for all categories | Nil on e-Mudra; regular loans not stated |
| Longest term loan tenure | Up to 84 months | Up to 7 years |
| Rate | As applicable to the MSME sector | Set as a spread over RLLR |
| Digital route | Digital Mudra Loan and Jansamarth | DIGI MSME, PNBONE app and PNB e-Mudra |
You can read the matching details in the PNB Mudra loan page if you want to compare lenders before applying.
Key Terms in a Mudra Sanction Letter, Explained
A sanction letter packs several terms into a few lines. Knowing what each one means helps you compare offers and avoid surprises later.
| Term | What it means for you |
|---|---|
| Hypothecation | The assets bought with the loan, such as machinery or stock, stay with you but the bank holds a charge on them until you repay |
| Moratorium | A period at the start when you pay little or no principal, which helps a new business build sales first |
| Margin | The share of the project cost you pay from your own funds; the bank sets it as per its guidelines |
| Annual review | The bank reviews the limit every year; working capital is sanctioned for 12 months at a time |
| CGTMSE cover | A guarantee that backs the bank’s loan so it can lend without collateral; it does not reduce what you owe |
| Bureau score cut-off | The minimum credit score the bank accepts, which it sets as per its own guidelines |
What to Ask the Branch Before You Apply
The bank’s Mudra page leaves several numbers to the branch. Ask these questions so nothing is left open when you sign:
- What is the all-in interest rate for my category, and is it fixed or linked to a benchmark?
- What margin applies to my loan amount and facility type?
- What bureau score cut-off does the branch apply?
- Which documents does the branch need in addition to the list on the bank’s page?
- How long will the moratorium be, and when does the first instalment fall due?
- Will the sanction letter confirm nil processing charges and nil pre-closure charges in writing?
Keep copies of the application form and the sanction letter. If the branch asks for a payment to process a Mudra loan, check it against the bank’s published terms, which list the processing fee as nil.
Common Mistakes
- Paying an agent. The bank lists the application form, branch and digital routes itself, and a processing fee of nil for every category.
- Assuming the CGTMSE cover removes your liability. It protects the bank, and you still repay in full.
- Quoting an interest rate from a third-party site. Ask the branch for the rate in writing.
- Applying without a clear use of funds and quotations.
Frequently Asked Questions
What is the maximum Bank of Baroda Mudra loan?
Rs 20 lakh, in the Tarun Plus category, which is only for those who have successfully repaid a Tarun loan.
Does Bank of Baroda charge a processing fee on Mudra loans?
No. The bank’s page lists the processing fee as nil for all categories, with nil pre-closure charges.
Is collateral needed for a Bank of Baroda Mudra loan?
No collateral is required. The primary security is hypothecation of the assets created by the bank’s finance, and Mudra loans are covered under CGTMSE.
What is the interest rate on a Bank of Baroda Mudra loan?
The bank’s Mudra page says only that the rate is as applicable to the MSME sector and gives no fixed Mudra rate. Ask the branch for the rate in your sanction letter.
How long can I take to repay?
Term or demand loans can run up to 84 months with a suitable moratorium, and working capital is sanctioned for 12 months, both subject to annual review.
How can I apply online?
Use the bank’s Apply Online page and choose Digital Mudra Loan or Jansamarth. You can also download the form or visit a branch.
Which documents do I need for a Bank of Baroda Mudra loan?
You need the filled Mudra application form, identity and residence proof, business ID and address proof, photographs, proof of the loan requirement and any caste or minority proof if applicable. The branch may ask for more under the sanction terms.
Can a farming business get a Bank of Baroda Mudra loan?
The scheme is for non-farm enterprises. The bank lists allied agriculture activities such as horticulture and fisheries as included since 1 April 2016. Confirm with the branch whether your activity qualifies.
Does WeCredit sanction Bank of Baroda Mudra loans?
No. WeCredit does not sanction government scheme loans. Confirm current terms with Bank of Baroda and on the official sources listed below.
