PNB Mudra Loan: Eligibility, Limits and How to Apply
Reviewed by: WeCredit Research Team
Punjab National Bank (PNB) lends under the Pradhan Mantri Mudra Yojana (PMMY) in four size categories, from Rs 50,000 up to Rs 20 lakh, for non-farm micro and small businesses. Loans up to Rs 10 lakh are collateral-free under PNB’s guidelines, and PNB also runs a separate digital product, PNB e-Mudra, for up to Rs 1 lakh.
Quick answer: you apply to a PNB branch or through PNB’s digital MSME route, and PNB decides the sanction, the rate and the final document list. WeCredit does not sanction government scheme loans, so confirm the latest terms with PNB before you apply.
PNB Mudra Loan at a Glance
| Item | What PNB’s published guidelines say |
|---|---|
| Scheme | Pradhan Mantri Mudra Yojana (PMMY), offered by PNB for income-generating activities |
| Maximum loan | Rs 20 lakh in total exposure from all banks and financial institutions per borrower |
| Facility types | Term loan, working capital (fund or non-fund based) and composite loan (term loan plus working capital) |
| Security | Primary security is hypothecation of assets created from the PNB loan. Collateral-free up to Rs 10 lakh, with CGTMSE guarantee cover |
| Repayment | Up to 7 years including a maximum moratorium of 3 months |
| Subsidy | None stated in PNB’s Mudra guidelines. It is a loan, not a grant |
| Digital route | DIGI MSME on pnb.bank.in, the PNBONE app or PNB net banking; PNB e-Mudra for up to Rs 1 lakh |
Loan Categories and Limits at PNB
PNB groups PMMY loans into four categories by the amount sanctioned.
| Category | Loan amount | Condition |
|---|---|---|
| Shishu | Up to Rs 50,000 | None beyond PNB’s general eligibility |
| Kishor | Above Rs 50,000 up to Rs 5 lakh | None beyond PNB’s general eligibility |
| Tarun | Above Rs 5 lakh up to Rs 10 lakh | None beyond PNB’s general eligibility |
| Tarun Plus | Above Rs 10 lakh up to Rs 20 lakh | For entrepreneurs who have successfully repaid an earlier Tarun loan |
If your funding need sits between Rs 50,000 and Rs 5 lakh, the page on Mudra Kishor loan details explains the limits and checks that apply to that category.
Who Can Apply
PNB’s guidelines allow loans to individuals, proprietorships, partnerships, LLPs, private and public companies, or any other legal entity, as long as the activity is income-generating and non-farm. PNB lists these uses of the loan:
- Business loans for vendors, traders, shopkeepers and service-sector units
- Working capital for micro units and equipment finance for small manufacturers
- Commercial transport vehicles, and commercial-use tractors, tillers and two-wheelers
- Agriculture-allied non-farm activities such as pisciculture, bee keeping and poultry
PNB can also lend on a cluster basis, subject to the Rs 20 lakh ceiling.
Margin, Security and Tenure
Margin is the part of the project cost you put in yourself. PNB’s guidelines set it by loan size:
| Facility | Loan size | Margin |
|---|---|---|
| Term loan | Up to Rs 2 lakh | Nil |
| Term loan | Above Rs 2 lakh to Rs 5 lakh | 15% |
| Term loan | Above Rs 5 lakh to Rs 20 lakh | 20% |
| Cash credit | Below Rs 2 lakh | Nil |
| Cash credit | Above Rs 2 lakh | 5% |
Repayment can run up to 7 years, including a moratorium of up to 3 months. The primary security is the asset your loan creates, such as machinery or stock. Loans up to Rs 10 lakh need no collateral, and the guarantee cover is provided through CGTMSE. Anything above Rs 10 lakh falls in Tarun Plus, which the Mudra Tarun Plus loan page explains in detail.
Interest Rate: How PNB Prices Mudra Loans
PNB does not quote one flat Mudra rate. Its guidelines price the loan as a spread over the bank’s repo-linked lending rate (RLLR). PNB’s rate table runs to Rs 25 lakh, while the Mudra exposure cap is Rs 20 lakh.
| Loan amount | Digital MSME loans | Other loans |
|---|---|---|
| Up to Rs 50,000 | RLLR + BSP + 1.65% | RLLR + BSP + 1.90% |
| Above Rs 0.50 lakh up to Rs 25 lakh | RLLR + BSP + 2.15% | RLLR + BSP + 2.40% |
Ask the branch for the current RLLR and BSP figure and the all-in rate written in your sanction letter. The spreads above are the only rate figures PNB’s guidelines state, so do not rely on any rate quoted by agents or third-party sites.
PNB e-Mudra: Digital Loan up to Rs 1 Lakh
PNB e-Mudra is a separate, fully digital product for loans up to Rs 1 lakh, so depending on the amount sanctioned it falls in the Shishu or Kishor band. Amounts up to Rs 50,000 are covered in the Mudra Shishu loan overview.
| Feature | PNB e-Mudra |
|---|---|
| Amount | Up to Rs 1,00,000 |
| Who qualifies | Individuals and sole proprietors with an active PNB savings or current account for at least 12 months, aged 18 to 60 |
| Udyam registration | Udyam number is mandatory |
| Existing loans | No other business loan outstanding with any bank |
| Repeat borrowers | Former PNB borrowers qualify if the loan closed in the last 12 months without degradation and was not closed within six months of first disbursement |
| Amount decided by | Credit summation in your operative account, or successful repayment and closure of a previous loan in the last 12 months |
| Repayment | Up to 5 years including a maximum moratorium of 3 months |
| Interest | RLLR + 1.40% |
| Margin and fees | Nil margin and no processing fee |
| Process | Fully digital sanction, no physical documentation, disbursal in a few minutes |
| Security | Covered under CGTMSE |
Documents to Keep Ready
PNB confirms the final document list at the branch. PNB provides a common PMMY loan application form on its website, and e-Mudra needs your Udyam registration number and an operative PNB account. Before you visit, gather items that most MSME loans need:
- Your Udyam registration number (compulsory for e-Mudra) or other business registration or licence
- The filled PNB PMMY application form
- Identity and address proof of the owner or partners
- Details of the business activity, such as quotations for the machinery or stock you plan to buy
- Statements of the PNB account you operate, since e-Mudra amounts depend on credit summation
How to Apply for a PNB Mudra Loan: Step by Step
- Decide the amount and the use of funds, and check which of the four categories it falls in.
- If your need is Rs 1 lakh or less and you hold a PNB account for 12 months or more, check the e-Mudra conditions first.
- For other loans, open pnb.bank.in, select DIGI MSME under online services, or use the PNBONE app or PNB net banking. You can also visit your nearest PNB branch.
- Fill in the PMMY application form and submit the documents the branch asks for.
- PNB appraises the proposal, fixes margin, rate and tenure, and issues a sanction letter.
- Read the sanction letter for the all-in rate, margin, fees and repayment schedule before you accept.
If your business does not fit PMMY, browse the government loan schemes hub for other schemes you can apply for through banks.
Worked Example: Rs 4 Lakh Project Financed by PNB
Suppose a small workshop needs equipment worth Rs 4,00,000. Under PNB’s margin table, a term loan above Rs 2 lakh and up to Rs 5 lakh carries a 15% margin. If the branch applies that margin to the full project cost, the owner puts in Rs 60,000 and PNB lends Rs 3,40,000, which falls in the Kishor band.
Assume an all-in rate of 11% for illustration only, as PNB sets the real rate. Over 5 years (60 months), the EMI would be about Rs 7,392 and the total interest about Rs 1.04 lakh. The branch may apply the margin differently, so use the sanction letter as the final word.
Is a PNB Mudra Loan Right for You? Checklist
- The business is non-farm and income-generating, such as trading, services, manufacturing or allied activity.
- Total borrowing from all banks and institutions for the unit stays within Rs 20 lakh.
- You can arrange the margin if the loan is above Rs 2 lakh.
- You can show a repayment plan that fits within the 7-year limit.
- For Rs 10 lakh or less, you are comfortable with a loan backed by the assets it creates rather than separate collateral.
- For Tarun Plus, you have repaid an earlier Tarun loan.
Why Mudra Applications Stall and How to Avoid It
| Reason | What to do |
|---|---|
| Business is farm-based | PMMY covers non-farm activity; only allied activities such as poultry or bee keeping are included |
| Exposure above Rs 20 lakh | Total borrowing from all banks cannot go beyond Rs 20 lakh per borrower |
| Tarun Plus without earlier repayment | Repay a Tarun loan first; Tarun Plus is for those who already did |
| e-Mudra with another business loan running | Close the other loan or apply through the regular route |
| e-Mudra account less than 12 months old | Wait until the PNB account has been active for 12 months |
| Udyam number missing for e-Mudra | Register on Udyam before applying |
Regular PNB Mudra vs PNB e-Mudra
| Point | PNB Mudra (regular) | PNB e-Mudra |
|---|---|---|
| Maximum amount | Up to Rs 20 lakh | Up to Rs 1 lakh |
| Margin | Nil to 20% by loan size | Nil |
| Tenure | Up to 7 years | Up to 5 years |
| Rate | RLLR + BSP + spread | RLLR + 1.40% |
| Paperwork | Application form and branch documents | No physical documentation |
| Who can use it | Any eligible non-farm borrower | PNB account holders with an active account for 12 months or more |
Common Mistakes
- Paying an agent or middleman. e-Mudra carries no processing fee, and nothing in PNB’s guidelines requires an intermediary.
- Assuming the guarantee removes your liability. CGTMSE cover protects the bank, and you still repay in full.
- Comparing only the headline limit and ignoring margin and tenure.
- Applying for a larger band than you need, which raises margin and repayment burden.
Frequently Asked Questions
What is the maximum PNB Mudra loan?
Rs 20 lakh in total exposure from all banks and financial institutions, in the Tarun Plus band, for entrepreneurs who have repaid a Tarun loan.
Is a PNB Mudra loan collateral-free?
PNB’s guidelines state collateral-free lending up to Rs 10 lakh, with CGTMSE cover. The primary security is the assets created from the loan.
What is the PNB Mudra interest rate?
PNB prices Mudra loans as RLLR + BSP + a spread of 1.65% to 2.40% depending on loan size and whether it is a digital MSME loan. PNB e-Mudra is RLLR + 1.40%. Ask the branch for the current all-in rate.
How can I apply for a PNB Mudra loan online?
Visit pnb.bank.in, choose DIGI MSME under online services, or use the PNBONE app or PNB net banking. You can also apply at a branch.
Who can get PNB e-Mudra?
Individuals and sole proprietors aged 18 to 60 with a PNB savings or current account active for at least 12 months, a Udyam number and no other business loan outstanding.
Does PNB charge a processing fee on Mudra loans?
PNB e-Mudra has no processing fee and no margin. For regular Mudra loans, the guidelines do not state a fee, so check the sanction letter.
Does WeCredit sanction PNB Mudra loans?
No. WeCredit does not sanction government scheme loans. Confirm current terms with PNB and on the official sources listed below.
