PMEGP loan stuck at the bank: how to get it moving
Your PMEGP application has been recommended by the DIC or KVIC and sent to the bank – and then nothing. This is the most common complaint we hear about PMEGP. The bank still has to be satisfied the project will work. Here is why files get stuck and how to get yours sanctioned.
Updated 2026-10-27 · Funding Desk credit panel
Why PMEGP files get stuck
- Weak project report – sales and profit numbers that the branch does not believe
- Premises papers – rented place without a registered rent agreement or the owner's NOC
- Own contribution not ready – you must bring 5% (special category) or 10% (general) of the project cost
- CIBIL issues of the applicant or family members
- Branch far from the unit – the bank cannot inspect it easily
- EDP training not done – the subsidy is released only after the training
How to get it moving
- Meet the branch manager with the file and ask what exactly is pending. Get it in writing or by email.
- Fix the papers – a registered rent agreement, quotations on the supplier's letterhead, your margin money in the bank account.
- Track it on the KVIC PMEGP portal and tell the DIC or KVIC officer who forwarded it. They review pending cases with banks every month.
- Escalate to the bank's regional office. If there is no reply within 30 days, file on cms.rbi.org.in.
- Ask for transfer to another bank through the portal if this branch refuses.
PMEGP in short
- Project cost up to ₹50 lakh for manufacturing and ₹20 lakh for services
- Subsidy of 15% to 35% of the project cost, depending on category and area
- Pure trading is not allowed – a shop or franchise usually fits Mudra or CGTMSE better
- No collateral up to ₹20 lakh for micro and small units; CGTMSE cover above that
Common questions
How long does a PMEGP loan take?
With complete papers, 1 to 3 months from the bank receiving the file. Most delays come from missing premises papers or questions on the project report.
Can I change the bank after my PMEGP application is forwarded?
Yes. Ask the DIC or KVIC office to send it to another bank through the portal, especially if the first bank has given a written refusal.
Is PMEGP available for a shop or trading business?
No. Trading activities are on the negative list. A shop or franchise can look at Mudra, a CGTMSE-backed loan or a working capital limit instead.
When is the PMEGP subsidy given?
It is kept in the bank as a margin money deposit and adjusted against the loan after 3 years, if the unit is running.