General Knowledge · Banking Awareness
Why do banks prescribe simplified documentation requirements for extending credit loans to Self-Help Groups (SHGs)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1To centralize loan control mechanism entirely within the bank
- 2To accommodate the fact that SHGs are generally informal and unregistered groups✓
- 3To completely bypass the standard KYC norms
- 4To actively discourage loan defaults
Correct answer
To accommodate the fact that SHGs are generally informal and unregistered groups
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