The Press Information Bureau (PIB) has warned citizens against a fake loan approval letter circulating on social media that falsely claims to offer a Rs 10 lakh loan under the Pradhan Mantri Mudra Yojana in exchange for a processing fee of Rs 6,550.

PIB Fact Check said the viral document is fraudulent and urged people not to fall for such scams targeting those seeking financial assistance under government schemes.

PIB debunks viral loan approval letter

In a post on X, PIB Fact Check dismissed the circulating letter as fake and clarified that no such loan approval process exists.

“A #fake loan approval letter is circulating, claiming to grant a loan amount worth Rs 10 lakhs under the Pradhan Mantri Mudra Yojana on payment of a processing fee of Rs 6,550. The letter is fake. MUDRA does not provide direct loans to individuals or micro-entrepreneurs. It is a refinancing agency,” PIB Fact Check said.

How MUDRA scheme actually works

PIB clarified that Micro Units Development and Refinance Agency Ltd. (MUDRA) does not directly offer loans to individuals or entrepreneurs.

Instead, MUDRA functions as a refinancing institution that provides funds to banks, NBFCs, microfinance institutions, regional rural banks, small finance banks and other authorised lenders, which then provide loans to eligible businesses.

Primarily, the scheme supports micro and small enterprises involved in manufacturing, services, trading and agri-related sectors.

ALSO READ

Government warns against upfront payment scams

The PIB Fact Check team has advised citizens to stay alert against loan offers that demand advance payments or processing charges in the name of government schemes. It also said that genuine Mudra loans are available only through authorised financial institutions and applicants should verify information through official portals or bank branches before proceeding.

Report suspicious claims immediately

Reiterating its warning, PIB Fact Check said any demand for money in exchange for loan approval under government-backed schemes should be treated as suspicious.

The PIB also urged people to verify all such claims from official government sources and report fraudulent activity immediately to avoid falling victim to scams.