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PIB Fact Check has flagged a fake PM Mudra loan approval letter claiming Rs 7 lakh on payment of fees, clarifying that MUDRA never lends directly to individuals.
The government has cautioned citizens to remain alert against unsolicited loan offers, especially those demanding upfront payments.
PM Mudra Yojana Scam: A fake loan approval letter claiming to sanction a loan of Rs 7 lakh under the PM Mudra Yojana is circulating on social media, prompting the government’s fact-checking agency to issue a clarification. The letter falsely asks applicants to pay Rs 860 as “agreement charges” to avail the loan.
The PIB Fact Check unit has confirmed that the letter is fake and urged citizens to stay alert against such frauds.
What the Fake Letter Claims
According to the viral claim, the letter promises a Rs 7,00,000 loan under the Pradhan Mantri Mudra Yojana after the applicant pays a small upfront fee. PIB Fact Check has categorically stated that no such approval letters are issued directly to individuals, and Mudra does not ask for any processing or agreement charges in this manner.
What Is MUDRA and How It Works
MUDRA, short for Micro Units Development & Refinance Agency Ltd., is a financial institution set up by the Government of India in 2015. It was announced during the Union Budget for FY 2016 with the aim of supporting micro and small enterprises.
Importantly, MUDRA does not lend directly to individuals or entrepreneurs. Instead, it works as a refinancing agency, providing funds to “last-mile financiers” such as banks, NBFCs, microfinance institutions (MFIs), regional rural banks, small finance banks, and certain societies and trusts. These institutions then extend loans to eligible micro and small businesses engaged in manufacturing, trading, services, and agri-allied activities.
How to Avoid Mudra Loan Scams
The government has advised citizens to be cautious of unsolicited loan offers, especially those demanding upfront payments. Genuine Mudra loans are available only through authorised lending institutions, and applicants should always verify information through official portals such as the Mudra website or their bank branch.
PIB Fact Check has reiterated that any demand for money in exchange for loan approval under government schemes is a red flag and should be reported immediately.
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January 26, 2026, 07:00 IST
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