Chit funds act 1978 pdf

Be it enacted by parliament in the thirtythird year of the republic of india as follows. Act to override other laws, memorandium,articles,etc. Importantly, as per the act, a prize chit or a money circulation scheme banned under the provisions of the prize chits and money circulation scheme banning act, 1978 shall be deemed to be an. The act says that the prize money, net of the foremans commission, cant be less than 60% of the total value of the chit. An act to provide for the regulation of chit funds and for matters connected therewith. Before that, chit funds were not governed by any central law. A chit fund is a type of savings scheme practised in india, besides other forms of savings scheme offered by various public and private sector banks, post offices, insurance corporations etc. Vital parliamentary acts related to banking sector in india. The chit funds act 1982 lays down some important ground rules for chit funds. In india, the chit funds are governed regulated by. However, the state acts may override certain provisions as deemed necessary.

Section 2b of the under chit fund act 1982 defines chit as. Received the assent of the president on the 22nd june 1 961. Chit funds are indigenous financial institutions in india that cater to the financial needs of the lowincome households, which have been excluded from the formal financial system. Prize chits and money circulation schemes banning act, 1978 pdf file act no. Block will be used to display browser versions to be supported by portal. Police action under prize chits and money circulation schemes. Short title, extent and commencement 1 this act may be called the chit funds act, 1982. Chit fund business is regulated under the central act of chit funds act, 1982 and the rules framed under this act by the various state governments for this purpose. Penalty for contravening the provisions of section 3. Model rules under the prize chits and money circulation schemes banning act, 1978 have been sent by the ministry of finance to the state. Chit funds in india are governed by the chit funds act, 1982. Electronic fund transfer act the electronic fund transfer act efta 15 usc 1693 et seq.

The chits funds act,1982 statement of objects and reasons 1a. Banning of unregulated deposit schemes act egazette. According to a report of asian development bank, the turn over of some 1066 chit fund companies, as far back as 1986 was, an astounding rs. In exercise of the powers conferred by subsection 3 of section 1 of the chit funds act. Be it enacted by parliament in the twentyninth year of the republic of india as follows.

Under this act, the chit fund businesses can be registered and regulated only by the respective state governments. Discount, divident, drawing, firm, foreman, nonprized subscriber, prize amount, subscriber, ticket. Chit funds act 1982 defines a chit fund company as a company which conducts, manages and supervises a chit fund scheme. Central chit fund act chit fund companies bangalore. The chit funds act, 1982 was enacted to provide for the regulation of chit funds and for matters connected therewith. If your complaint relates to multilevel marketing scheme or a scheme falling under the price chit and money circulation schemes banning act, 1978, including a company carrying on chit fund business, please lodge your complaint with the ministry of finance, department of economic affairs, government of india. Short title and extent 1 the act may be called the prize chits and. Organised chit fund schemes are required to register with the registrar of firms, societies and chits. Chit funds chitty kuri miscellaneous nonbanking company. The act aims to ban the promotion and circulation of prize chits and money circulation. I was aware of sarada chit fund scam but not completely aware of working behind the chit fund.

Chit funds act, 1982 in 1982, the ministry of finance enacted the chit funds act to regulate the sector. Eft services include transfers through automated teller machines, pointofsale terminals, automated clearinghouse systems. The prize chits and money circulation schemes banning act, 1978 was enacted on 12th december, 1978. Act 28 of 1971 revised edition 20 31st october 20 an act to provide for the licensing and regulation of chit funds. One key guideline is regarding the discount that a member is willing to take on the chit. I an act to provide for the regulation of chit funds in the pstae of tamil nadu. These changes have become operative from the beginning of this year. The estimated turnover of registered chit companies all over india as of now is exceeding rs 35,000 crores per annum. Under the act, the central government can choose to notify the act in different states on different dates. Central government has not framed any rules of operation for them. In this act, unless the context otherwise requires, a conventional chit means a transaction whether called chit, chit fund, kuri or by any other name by or under which a person responsible for the conduct of the chit enters into an agreement. The chit funds act, 1982, is within the leigislative competence of the parliament. The kerala chitties amendment act, 1978 act no 19 of 1978 came into force on 03051978 amendment insertion of new section 70 a power to exempt the kerala finance act,2002 wherever 20% of subscribers resides, there must have the office of chitty company. For instance, the andhra pradesh chit funds act 1971 had previously required the chit managers in that state to deposit only 50% of the chit value with the registrar of chits prior to the commencement of the chit scheme.

Important parliamentary acts related to banking sector in. Banning of prize chits and money circulation schemes or enrolment as members or participation therein. Regulator of chit funds is the registrar of chits appointed by respective state governments under section 61 of chit funds act. States are responsible for notifying rules and have the power. Employees provident funds and miscellaneous provisions act, 1952 employees state insurance act. Chit funds act, 1982 mylegalwork online legal help. No chit shall be commenced or conducted without obtaining the previous sanction of the state government within whose jurisdiction the chit is to be commenced or conducted or of such officer as may be empowered by that government in this behalf, and unless the chit is registered in that state in accordance with the provisions of this act. Madras chit funds act, 196t as extended to delhi along with delhi chit fund rules, 1964 95. Prize chits and money circulation schemes banning act, 1978.

Now chit funds are trying to carve out a cleaner identity, a campaign that culminated in a slew of amendments to the chit fund act. Schemes schemes banning act, 1978 and banning act, 1978 and the chit funds act, 1982 and the legislations enacted by the legislations enacted by the sg sg sg have have not been able to completely address the issue of unregulated the issue of unregulated deposit deposit schemes schemes run by unscrupulous run by unscrupulous elements ca. Financial intelligence unit india, ministry of finance, govt. Thus,registration and regulation of chit funds are carried out by state governments under the rules framed by them. The amendments to chit funds act aim to facilitate orderly growth of the sector and remove bottlenecks being faced by the industry, thereby enabling greater financial access of. A prize chit or a money circulation scheme banned under the provisions of the prize. In this act, unless the context otherwise requires.

Circulation schemes banning act, 1978 have been sent by the ministry of finance to. Chits and money circulation scheme banning act, 1978. The prize chits and money circulation schemes banning. Home actsofparliamentfromtheyear the prize chits and money circulation schemes banning act, 1978 the prize chits and money circulation schemes banning act, 1978 language undefined. With appropriate changes, this act was adopted, with effect from 15th july, 1964, in the union territory of delhi. Under the act chit fund act department of goods and. This recent sca m is con sidered to create a world recor d by slapping nearl y 60 cases a gainst mr. Regulation e electronic fund transfer act the electronic fund transfer act efta 15 u. A chit fund company is a company that manages, conducts, or supervises such a chit fund, as defined in section of the chit funds act, 1982. The union territory of pondicherry has the pondicherry chit funds act, 1966, which came into force from 1st august, 1967. Amended chit fund act brings tighter norms, transparency. Rules regulations notifications orders circulars statutory ordinance statutes.

Chit fund act1982 is a central act to provide for the regulations of the chits fund business and for the matters related thereon. Copies of chit agreement to be given to subscribers. It shall come into force on such date as the central government may, by notification in the official gazette, appoint, and different dates may be appointed for different states. The biggest chit fund sca m e ver heard in india is the sarad ha group chit fund scam. The tamil nadu chit funds act of 1961, seeks to regulate the chit fund business in the state of tamil nadu. I did good research and thought of sharing my knowled. Money circulation schemes are banned under the prize chit and money circulation schemes banning act 1978 and the respective state governments have. General insurance business nationalization amendment act. The act classifies chits into conventional chits and prize chits. It extends to the whole of india except the state of jammu and kashmir.