NEW DELHI, October 14 — The Department of Financial Services (DFS), Ministry of Finance, on Wednesday officially notified operational guidelines enhancing the lending ceiling under the Pradhan Mantri Mudra Yojana (PMMY) from ₹10 lakh to ₹20 lakh, introducing a new credit tier designated as 'Tarun Plus'.
According to the DFS regulatory circular, the 'Tarun Plus' category facilitates collateral-free institutional credit between ₹10 lakh and ₹20 lakh for graduated micro-enterprises that have previously borrowed under the 'Tarun' tier and demonstrated exemplary repayment records. To derisk commercial exposure, loans extended under the expanded threshold are covered by credit guarantee underwriting up to 75 percent through the Credit Guarantee Fund for Micro Units (CGFMU) administered by NCGTC.
With this modification, the PMMY operational structure spans four graduated borrowing brackets: 'Shishu' (loans up to ₹50,000 for startup units), 'Kishore' (loans above ₹50,000 up to ₹5 lakh for mid-stage enterprises), 'Tarun' (loans above ₹5 lakh up to ₹10 lakh), and the newly created 'Tarun Plus' (above ₹10 lakh up to ₹20 lakh). Commercial banks, RRBs, and NBFC-MFIs have been instructed to align loan disbursement workflows to the enhanced credit limits.
The institutional design of the Micro Units Development and Refinance Agency (MUDRA established in April 2015 as a subsidiary of SIDBI), Priority Sector Lending (PSL) categories, credit risk mitigation under the CGFMU framework, MSME definition criteria under the MSMED Act 2006, and financial inclusion via the JAM trinity are core syllabus topics across UPSC Civil Services (GS-III: Inclusive Growth & Banking) and RBI Grade B recruitment exams.