Self‑Help Group (SHG) Skills
Work & Livelihood
Financial Basics – UPI & Banking
1. Simple Explanation
| Concept | What it Means | Why It Matters for SHG Members |
|---|---|---|
| Bank Account | A deposit box held by a bank where you can keep money, receive payments, and pay others. | Enables safe saving, easy loan access, and official record‑keeping. |
| UPI (Unified Payments Interface) | A real‑time mobile payment system that lets you send/receive money instantly using a phone. | No need for cash or cheques; works 24/7; instant receipts; great for group transactions. |
| Mobile Banking / Internet Banking | Banking services accessed through a phone or computer. | Lets you check balances, transfer money, pay bills, all from home. |
Bottom line – A bank account gives you ownership of money, while UPI gives you a convenient, paper‑free way to move that money around.
2. Key Points
| Banking | UPI |
|---|---|
| • Types of accounts – Savings, Current, and Pay‑Bill. | • UPI ID – e.g., name@bank or a virtual number. |
| • Opening an account – KYC (ID, address proof, photo), minimum balance, small fee. | • Linking – Use a UPI app, scan QR, or enter UPI ID. |
| • Safety – PIN, OTP, ATM card, signatures, and a safe for cheques. | • Security – Never share OTP; use a strong app password; enable fingerprint/face unlock. |
| • Fees – Account maintenance, ATM withdrawal, overdraft, service charges. | • Limits – ₹2,00,000 per day per account (most banks). |
| • Record‑keeping – Statements, receipts, ledgers. | • Receipts – App shows transaction ID, time, and amount. |
| • Group account – One account for the SHG, all members sign or have a signature list. | • Group UPI – Use a single UPI ID for the SHG; members can pay into it and withdraw. |
3. Step‑by‑Step Guide
3.1 Opening a Bank Account
- Choose a bank –
• National banks (State Bank of India, HDFC),
• Regional Rural Banks (RRB),
• Cooperative banks, or
• Microfinance institutions. - Collect documents –
• Photo ID (Aadhaar, PAN, Voter ID, Passport).
• Address proof (Aadhaar, ration card, utility bill).
• Photo (passport size). - Visit the branch – Fill the application form, submit documents.
- Receive account number – The bank will provide a passbook, debit card, and a PIN.
- Activate the debit card – Usually by calling the bank or using an ATM.
- Set up mobile/internet banking – Register with the bank’s app or website.
3.2 Setting Up UPI
| Option | Steps |
|---|---|
| Using a bank’s UPI app (e.g., BHIM) | 1. Download BHIM. 2. Register with your bank account. 3. Create a UPI PIN (6‑digit). |
| Using a third‑party app (Google Pay, PhonePe, Paytm) | 1. Download the app. 2. Link your bank account. 3. Create UPI PIN or use app password. |
Link UPI to group account
- The SHG can create a UPI ID like
shgname@bank. - All members can use this ID to deposit into the group account.
- The SHG’s bank representative can set up an official UPI ID for the group.
3.3 Making a Payment via UPI
- Open the UPI app.
- Select Send Money.
- Enter the UPI ID or scan a QR code.
- Input the amount.
- Confirm the details.
- Enter the UPI PIN.
- Wait for the Transaction Successful message.
- Save the receipt (app automatically stores it).
4. Worked Example
Scenario
The SHG needs to pay ₹2,500 to a local handloom vendor for raw materials. The vendor accepts UPI.
| Step | Action | Result |
|---|---|---|
| 1 | Vendor gives UPI ID vendor@bank. |
Transaction ID ready. |
| 2 | SHG member opens Google Pay, selects Send Money. | Interface ready. |
| 3 | Enters vendor@bank and ₹2,500. |