MUDRA Bank has been set up to implement Pradhan Mantri Mudra Yojana. 'MUDRA' stands for:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Micro Units Development and Refinance Agency
MUDRA (Micro Units Development and Refinance Agency Ltd.) was set up in 2015 as a subsidiary of SIDBI to carry out the Pradhan Mantri Mudra Yojana. It does not lend to small businesses directly; it refinances banks, NBFCs and microfinance institutions that give loans of up to ₹10 lakh to non-farm micro enterprises (in the Shishu, Kishor and Tarun categories).
Why the other options are incorrect
Option (2) Micro Units Development Resource Allocation — Incorrect. It drops ‘Refinance’, the word that says what MUDRA does.
Option (3) Medium Unit Development Revenue Allotment — Incorrect. MUDRA serves micro units, not medium ones, and it neither collects nor allots revenue.
Option (4) Micro Unit Development Refinance Arrangement — Incorrect. The last word of the name is ‘Agency’, not ‘Arrangement’; MUDRA is an institution, not an arrangement.