Economics · Economy
Which of the following describes the operational mechanism and statutory compliance requirements for the registration and PAN applicability of Self Help Groups (SHGs) according to the RBI and NABARD guidelines?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Bank linkage of SHGs is only permitted if the group is registered under the Indian Partnership Act, 1932 and maintains a minimum capital of ten lakh rupees in its savings account.
- 2Every SHG must consist of exactly twenty members from the same family to ensure trust, and the group must register as a Non-Banking Financial Company (NBFC) to lend to its own members.
- 3SHGs are informal groups that do not require registration under any specific statute for bank linkage, and the PAN of the group is not mandatory for opening a savings account as per RBI Master Directions.✓
- 4SHGs must be compulsorily registered under the Societies Registration Act, 1860 to open a savings bank account and are mandated to obtain a unique PAN for the group as a whole.
Correct answer
SHGs are informal groups that do not require registration under any specific statute for bank linkage, and the PAN of the group is not mandatory for opening a savings account as per RBI Master Directions.
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