Bank of Maharashtra Mudra Loan: Rates, Fees, How to Apply
Reviewed by: WeCredit Research Team
Bank of Maharashtra lends under the Pradhan Mantri Mudra Yojana (PMMY) up to Rs. 20 lakh for micro enterprises in manufacturing, trading, services, food processing and agriculture-allied activities. Collateral is nil, margin is 25%, and the interest rate is the bank’s RLLR plus a spread of 2.25% (up to Rs. 10 lakh) or 2.00% (above Rs. 10 lakh), plus a BSS of 0.50%.
Quick answer: download the Shishu form or the Kishore and Tarun form from the bank’s Pradhan Mantri Mudra Yojana page, keep your Udyog Aadhaar registration number ready, and apply to the bank. WeCredit does not sanction government scheme loans or Mudra loans. Confirm current terms on the Bank of Maharashtra Mudra page before you apply.
Bank of Maharashtra Mudra Loan at a Glance
| Item | What the bank’s page states |
|---|---|
| Loan size | Up to Rs. 20 lakh |
| Purpose | Capital assets, working capital or marketing needs of a micro enterprise; not for consumption or personal needs |
| Facility | Term loan, or cash credit / overdraft |
| Margin | 25% |
| Collateral | Nil |
| Primary security | First and exclusive charge on assets created out of the loan and assets directly associated with the business |
| Guarantee | MUDRA guarantee cover under CGFMU (NCGTC); guarantee fee is borne by the borrower |
| Interest rate | RLLR + 2.25% + BSS up to Rs. 10 lakh; RLLR + 2.00% + BSS above Rs. 10 lakh |
| Prepayment charges | Nil |
Who Can Apply (Eligibility)
The bank’s page says the loan is for new or existing micro units and enterprises, including those set up under the Joint Liability Group (JLG) framework, in any sector covered under PMMY or as per the MSMED Act, 2006. The units must meet the eligibility criteria prescribed by CGFMU, and the credit requirement must stay within the PMMY limit of Rs. 20 lakh. The page lists these eligible applicants:
- Individuals, proprietary concerns, partnership firms, private limited companies, public companies and other legal entities.
- Self help groups that meet the eligibility criteria.
- Holders of a PMJDY account with a sanctioned overdraft of Rs. 10,000, which is also covered under the credit guarantee fund.
- Applicants who are not defaulters to any bank or financial institution and have a satisfactory credit track record.
- Individual borrowers may be required to have the skills, experience or knowledge to run the proposed activity.
Activities the page lists as examples include transport vehicles such as autos and e-rickshaws, salons and tailoring shops, food products such as sweet shops and small catering, textile work, shops and trading, equipment purchase for micro units, and allied agriculture such as beekeeping, poultry, dairy and fishing. Crop loans and land improvement such as canals, irrigation and wells are not covered.
Mudra Categories and Loan Limits
| Category | Loan amount | Interest spread over RLLR | Term loan processing fee |
|---|---|---|---|
| Shishu | Up to Rs. 50,000 | + 2.25% + BSS | Nil |
| Kishor | Above Rs. 50,000 to Rs. 5 lakh | + 2.25% + BSS | Nil |
| Tarun | Above Rs. 5 lakh to Rs. 10 lakh | + 2.25% + BSS | 1.00% of sanctioned limit |
| Tarun Plus | Above Rs. 10 lakh to Rs. 20 lakh | + 2.00% + BSS | 1.00% of sanctioned limit |
Tarun Plus is open to entrepreneurs who have taken and successfully repaid an earlier loan in the Tarun category. If your business needs between Rs. 50,000 and Rs. 5 lakh, read the details of the Mudra Kishor loan category before you choose a limit.
Interest Rate, Fees and Charges
The bank’s page states that at present its RLLR is 9.05% a year and the business strategy spread (BSS) is 0.50% a year. On those figures the all-in rate works out to 11.80% a year for loans up to Rs. 10 lakh (9.05 + 2.25 + 0.50) and 11.55% a year above Rs. 10 lakh (9.05 + 2.00 + 0.50). The page is undated, and RLLR can change, so ask your branch for the rate that applies on the day of sanction.
| Charge | Amount stated by the bank |
|---|---|
| Processing fee, working capital | Up to Rs. 5 lakh: nil. Above Rs. 5 lakh: 0.35% a year |
| Processing fee, term loan | Up to Rs. 5 lakh: nil. Above Rs. 5 lakh to Rs. 20 lakh: 1.00% of sanctioned limit |
| Commitment charges | Nil |
| Prepayment charges | Nil |
| Account handling (documentation, inspection, NeSL and CIBIL charges) | Up to Rs. 25,000: nil. Above Rs. 25,000 to Rs. 2 lakh: Rs. 2,000. Above Rs. 2 lakh to Rs. 20 lakh: 0.55% a year, minimum Rs. 2,500 |
| CGFMU guarantee fee | Borne by the borrower; amount not stated on the page |
The page says processing and account handling charges are as per the bank’s extant service charge guidelines, and the figures above are those applicable at present. Comprehensive insurance of the assets charged to the bank, with a bank clause, is also required.
Worked Example: Rs. 3 Lakh Kishor Term Loan
This is an illustration, not a quote. Suppose a tailoring unit borrows Rs. 3 lakh as a Kishor term loan at the 11.80% rate calculated above, repaid in 60 equal monthly instalments. The monthly instalment is about Rs. 6,640, total repayment is about Rs. 3.99 lakh and interest over five years is about Rs. 98,600. The processing fee is nil for a term loan up to Rs. 5 lakh, but account handling for a loan above Rs. 2 lakh is 0.55% a year with a minimum of Rs. 2,500, and the guarantee fee is extra. Tenure is not fixed by the page, which says term loans are repaid in suitable instalments with a moratorium that suits the business cash flow.
Term Loan or Cash Credit: Which Facility to Choose
The bank offers two forms of facility. A term loan is repaid in suitable instalments, with a moratorium that follows the cash flow of the business. A cash credit or overdraft limit is repayable on demand and is renewed or reviewed every year. The page describes the loan as a need-based term loan, overdraft limit or composite loan for capital assets, working capital or marketing needs, so tell the branch which of these you need, because the fee rules differ. A term loan above Rs. 5 lakh pays 1.00% of the sanctioned limit as processing fee, while a working capital limit above Rs. 5 lakh pays 0.35% a year. Both are nil up to Rs. 5 lakh.
The page ties the top category, the Mudra Tarun Plus loan, to entrepreneurs who have availed and successfully repaid an earlier loan in the Tarun category. A limit above Rs. 10 lakh is therefore not open to every new applicant.
Documents Needed
The bank’s page does not print a document list. It offers a Shishu application form and a Kishore and Tarun application form, both described as carrying a revised checklist and a field for the Udyog Aadhaar registration number. Use the checklist printed on the form you download, and ask the branch for anything it adds. From what the page does state, prepare:
- Your Udyog Aadhaar registration number, which the application forms ask for.
- Details of the business activity, project cost and the assets you plan to buy, since the loan cost depends on your business plan and proposed investment.
- Whatever else the checklist on your form lists. The page says individual borrowers may be asked about their skills, experience or knowledge of the activity, and that applicants must not be defaulters, but the papers that prove these are set by the bank.
Identity, address and other KYC papers follow the bank’s own checklist and are set by the bank.
How to Apply: Step by Step
- Work out which category fits your funding need using the table above.
- Open the bank’s Pradhan Mantri Mudra Yojana page and download the Shishu form (loans up to Rs. 50,000) or the Kishore and Tarun form. Regional-language forms are also listed for Marathi, Kannada, Manipuri, Assamese, Urdu and Tamil.
- Fill in the form with your Udyog Aadhaar registration number and complete the checklist printed with it.
- If you need working capital, the page also carries an “Apply Now” banner for the bank’s Digital Mudra Loan (working capital) route.
- Submit the completed form and documents as the bank directs. The page does not describe the submission or appraisal steps, so confirm them with your branch.
- Ask the bank to confirm in writing the rate, the processing and account handling charges, the guarantee fee that you will bear and the repayment schedule.
Is This Loan Right for You? Checklist
- My business is a micro enterprise in manufacturing, trading, services, food processing or allied agriculture, not a crop-growing activity.
- The loan is for business assets, working capital or marketing, not personal spending.
- I need Rs. 20 lakh or less.
- I have no default with any bank or financial institution.
- I can pay a 25% margin from my own side of the project cost.
- I have a Udyog Aadhaar registration number.
Conditions That Can Stop an Application
| Reason | What the bank’s page implies |
|---|---|
| Past default with a bank or financial institution | Applicants must not be defaulters and must have a satisfactory credit record |
| Loan for personal or consumption needs | The loan is not for consumption or personal needs |
| Crop loan or land improvement | These agricultural activities are not eligible under PMMY |
| Request above the limit | The specified maximum is Rs. 20 lakh |
| Tarun Plus without a repaid Tarun loan | Tarun Plus is for entrepreneurs who repaid a previous Tarun loan |
Common Mistakes
- Assuming the 11.80% worked rate is fixed. It depends on RLLR on the sanction date.
- Forgetting that the guarantee fee is paid by the borrower.
- Leaving out the Udyog Aadhaar registration number the forms ask for.
- Using a Mudra loan to repay personal debt or fund household spending.
- Ignoring the insurance requirement. The page says comprehensive insurance of the assets charged to the bank, with a bank clause, should be taken.
For the wider picture on state-backed credit, browse our government loan schemes hub.
Frequently Asked Questions
What is the maximum Mudra loan at Bank of Maharashtra?
Up to Rs. 20 lakh, split into Shishu (up to Rs. 50,000), Kishor (to Rs. 5 lakh), Tarun (to Rs. 10 lakh) and Tarun Plus (to Rs. 20 lakh).
Is collateral required?
The bank lists collateral as nil. The assets created out of the loan are charged to the bank as primary security, and the loan carries a CGFMU guarantee whose fee the borrower pays.
What interest rate does the bank charge?
RLLR plus 2.25% plus BSS for loans up to Rs. 10 lakh, and RLLR plus 2.00% plus BSS above that. With the bank’s stated RLLR of 9.05% and BSS of 0.50%, that is 11.80% and 11.55% a year. Confirm the current RLLR with the bank.
Is there a processing fee?
For a term loan, nil up to Rs. 5 lakh and 1.00% of the sanctioned limit above that. For working capital, nil up to Rs. 5 lakh and 0.35% a year above that.
Which documents are required?
The bank’s forms carry a revised checklist and ask for the Udyog Aadhaar registration number. The full document list is set by the bank, so use the checklist on the form and confirm with your branch.
Can I prepay the loan?
The page lists prepayment charges as nil.
Which businesses can get a Bank of Maharashtra Mudra loan?
Micro enterprises in manufacturing, trading, services, food processing and agriculture-allied activities. The page’s examples include transport vehicles such as autos and e-rickshaws, salons and tailoring shops, food products, textile work, shops and trading, equipment for micro units, and allied activities such as beekeeping, poultry, dairy and fishing.
Are crop loans covered?
No. The page says crop loans and land improvement such as canals, irrigation and wells are not eligible for coverage under PMMY.
Does WeCredit sanction Bank of Maharashtra Mudra loans?
No. WeCredit does not sanction government scheme loans. We explain how schemes and bank products work, and you should confirm current terms with Bank of Maharashtra.
