MUMBAI: Confederation of All India Traders (CAIT) has asked the government to remove MUDRA from RBI's purview and said the central bank has failed to deliver requisite finances to small businesses in the country.
Micro Units Development and Refinance Agency (MUDRA) was formed by the government to provide easy loans to small businesses.
"We have urged the Union Finance Minister Arun Jaitley to free MUDRA from the clutches of RBI by passing a legislation in Parliament and to make MUDRA as an independent regulator to lend finance to existing financial ecosystem catering to the needs of non-corporate sector," CAIT said in a statement.
"Such a step will be in accordance with the resolution of the Union Cabinet and 'funding for unfunded' declaration of Prime Minister Narendra Modi," it added.
The body also alleged that "RBI has failed to deliver requisite finances to small businesses in the country".
The confederation said MUDRA loans are being disbursed by commercial banks instead of other financial institutions as originally conceived by the government while launching MUDRA.
"The colonial mindset of the banks and stringent conditions is debarring the actual beneficiary in obtaining MUDRA loans," it added.