To ensure that members of Self-Help Groups (SHGs) are not kept out of the ambit of banking services, the Reserve Bank of India said that banks can open savings account for the SHG even if ‘know your customer’ verification is completed for only the office bearers of the SHG. “In order to address the difficulties faced by SHGs in complying with Know Your Customer (KYC) norms while opening savings bank accounts and credit linking of their accounts, it has been decided to simplify certain norms for SHGs,” RBI said.
Therefore, now, it is not necessary for the banks to complete the KYC of all members of the SHG before opening a bank account.
The RBI also clarified that since the banks would have already completed the KYC of the SHG while opening the bank accounts, there would be no need of a separate KYC verification while giving credit to the SHGs.