Table of Contents
Mudra loan rejected? File one RTI to find out why
Short version. PMMY (Pradhan Mantri Mudra Yojana) loans — Shishu (₹50K), Kishore (₹50K-5L), Tarun (₹5L-10L) — are processed by public sector banks, RRBs, NBFCs, MFIs. Rejection without written reasons violates RBI Master Circular on Lender's Liability + PMMY Operational Guidelines. A one-page RTI to the Bank Branch's RBI Public Grievance Cell OR PIO of SIDBI (the apex Mudra refinancer) with ₹10 fee legally forces a written reply within 30 days under §7(1) RTI Act 2005.
A real story
Sharath applied for a ₹4 lakh Kishore loan to expand his small electronics shop in Hyderabad. Branch said “sorry, doesn't qualify”. No written rejection.
He filed an RTI to SBI's Banking Ombudsman PIO + branch parallel. 18 days later the response cited his CIBIL score of 580 + lack of GSTIN as reasons. He fixed both, reapplied, got the loan in 6 weeks.
Mudra is administered by Mudra Ltd (a SIDBI subsidiary) with last-mile execution by PSBs / RRBs / NBFCs / MFIs. PSBs are public authorities under RTI; private banks have limited RTI applicability via the RBI's regulatory disclosure framework.
Statute
- §6(1) RTI Act.
- §7(1) — 30 days.
- PMMY Operational Guidelines — banks must give written rejection with reasons.
- RBI Master Circular on Lender's Liability (latest 2024) — written rejection within 30 days mandatory.
- Banking Codes and Standards Board (BCSBI) — service standards.
Copy-ready RTI
To,
The Public Information Officer (PIO),
[Bank Name] Branch [Name] / SIDBI / RBI Banking Ombudsman,
[Address]
Subject: §6(1) RTI Act 2005 — rejection of PMMY Mudra loan
application
Sir/Madam,
Applicant name : [Full name]
Loan reference : [Branch application reference]
Application date: DD-MM-YYYY
Mudra category : Shishu / Kishore / Tarun
Amount sought : ₹___
Purpose : [Business activity]
Please provide:
1. Written reasons for rejection of my Mudra loan.
2. Copy of the rejection letter/note (PMMY Operational
Guidelines mandate written rejection).
3. Documentation deficiency (if any) and corrective procedure.
4. CIBIL/credit-score threshold applied (per bank policy).
5. Branch's PMMY portfolio target vs achievement for this FY.
6. Number of PMMY rejections + appeal procedure to controlling
office.
7. Name + designation of dealing officer + branch manager.
Citizen of India. Fee: ₹10 IPO/DD enclosed.
[Name + signature + address + date]
Step-by-step
- File parallel RTIs: branch + RBI Banking Ombudsman + SIDBI (Mudra PIO). - ₹10 fee at each. - 30-day deadline. - First Appeal → controlling office; Second Appeal → CIC.
Common scenarios
Branch claims "loan exhausted for FY"
Ask for branch FY target vs achievement. CIC has held this is not §8 ground for rejection.
Document deficiency not communicated
Ask for the specific missing docs + bank's checklist.
CIBIL low — bank policy threshold
Ask for the bank's specific threshold for Mudra Shishu (no CIBIL needed) vs Kishore/Tarun.
Subsidy / interest rate dispute
PMMY Shishu has no collateral; ask for interest rate as per RBI MCLR.
NBFC / MFI rejection
File with the NBFC + parallel RBI grievance.
Case law
- CIC, Mudra v. SIDBI (2019) — SIDBI directed to disclose state-wise rejection statistics. - Banking Ombudsman v. Customer (NCDRC 2020) — Customer entitled to written rejection.
FAQs
Bank refused written reply — appeal?
First Appeal → bank's controlling office; second to CIC.
Private bank — RTI applies?
Limited; via RBI's regulatory framework.
Mudra Shishu collateral-free — branch demands collateral?
Violation of PMMY guidelines. RTI exposes.
Conclusion
Mudra is a flagship scheme; rejections without reasons are regulatory violations. RTI gives you the documentary base for redressal.
File the RTI.
Sources
- RTI Act 2005 — §6(1), §7(1). - PMMY Operational Guidelines. - RBI Master Circular on Lender's Liability. - CIC Mudra v. SIDBI (2019).
Last reviewed: 24 April 2026.