Does Reserve Bank Of India prohibits lending by banks to Hindu Undivided Families? If yes, is there any circul

Question

There was one dcision of the Supreme Court of India that HUF is not a legal entity. Inthat view of the matter, some banks have asked change in Deed of Partnership where HUF is a Partner and asked deletion of HUF from the Partnership.

Answer 1

I understand that HUF status is valid under the Income Tax Act only. In view of the traditional undivided Hindu Families' businesses, assets and incomes, this HUF status is honoured for income tax purposes. Otherwise, the Karta of the family, being not minor and incompetent otherwise, can undertake all business and financial transactions in his name on behalf of HUF.