Chit funds act 1982 section 25 liability of foreman to. The central act of chit funds, which formulates the register chit fund business, got into effect from 1982. Jul 27, 2014 in india, the chit funds are regulated by the chit funds act of 1982 enacted on august 19, 1982. Notification in exercise of the powers conferred by section 89 of the chit funds act, 1982 central act, 40 of 1982, the government of andhra pradesh, in consultation with the reserve bank of india, hereby makes the following rules chapter i. Chit funds act, 1982 tamil nadu chit fund rules, 1984. Chit fund act1982 is a central act to provide for the regulations of the chits fund business and for the matters related thereon. May 21, 20 in bangalore, there are 193 registered chit fund operations under the chit funds act 1982, with a turnover of about rs. 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.
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. Any person or company intends to carry chits business shall obtain prior sanction order p. An act to provide for the regulation of chit funds and for matters connected there with. Nov 24, 2017 various state and central regulations regulate chit funds in india. I was aware of sarada chit fund scam but not completely aware of working behind the chit fund. According to section 2b of the chit fund act, 1982. In india, the chit funds are governed regulated by. The flight of foremen and the chit like schemes have resulted in loss of revenue to the state. In india, the chit funds are regulated by the chit funds act of 1982 enacted on august 19, 1982. Received the assent of the president on the 22nd june 1 961. However, the number of unregistered chit operators is.
May 23, 20 states like tamil nadu, andhra pradesh and kerala had enacted legislation e. Chit means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money or a certain quantity of grain instead. The scheme of act, at this stage, may also be noticed. Chit fund companies are governed by chit fund act 1982 and rbi has specifically exempted from its core provisions. Chit fund act was passed in 1987 and a stay order was obtained on its implementation. The chits funds act,1982 statement of objects and reasons 1a. Be it enacted by the legislature of the state of andhra pradesh in. The 1982 act regulates chit funds, and prohibits a fund from being created without the prior sanction of the state government. A chit fund is a type of rotating savings and credit association system practiced in india. Under this act, marriages are solemnised and registered. Chit funds are governed by the chit funds act 1982. 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. Some alone, get the price money without obligation of paying future installments. To facilitate easy monitoring of the activities of chits it is necessary to.
Chit funds in india are governed by various state or central laws. Organised chit fund schemes are required to register with the registrar or firms, societies and chits. Nevertheless, a few large chit companies have retained their popularity among people. He further submits that the petitioner is governed by the provisions of chit fund act, 1982 and tamil nadu chit funds rules, 1984, as per which the petitioner required to maintain the ledger details for each of the subscribers and the amount deposited by the petitioner is only out of the amounts collected which are reflected in the register. Under a chit fund, people agree to pay a certain amount from time to time into a fund. In this act, unless the context otherwise require, aapproved bank means the state bank of india constituted under section 3 of the state bank of india act, 1955 23 of 1955, or a subsidiary bank constituted under section 3 of the state bank of india subsidiary banks act, 1959 33 of 1959, or a corresponding new bank constituted under section 3 of. Chit funds companies functions rbi regulations prize. 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. Every ubregistrar is a marriage officer under this act. Government of kerala published the chit fund rules 201204062012 notification government order nog. Let us understand how the chit fund companies or the committee works and will then proceed to how the company is registered in terms of chit fund act.
The dominant purpose of the act is to regulate the chit and control the activity of the foreman and protect the interests of the subscribers. Organised chit fund schemes are required to register with the registrar of firms, societies and chits. Chit funds have been associated with fraudulence for the past couple of decades. Zcf is indias first interestfree chit fund company. Chit fund act 1982 is a central act to provide for the regulations of the chits fund business and for the matters related thereon.
In exercise of the powers conferred by section 89 of the chit funds act, 1982, central act 40 of 1982, the government of. The chit funds act 1982 in india bare acts, banking and insurance, business and corporate, constitutional, consumer laws, criminal law, energy, environmental, family and inheritance, heritage and national importance, immigration law, labor law, the chit funds act 1982 national security, others, procedural and administration, property related, public utilities, shipping laws, tax laws. The marriages are solemnised by the pastors appointed by the government. In exercise of the powers conferred by section 89 of the chit funds act, 1982 central act, 40 of 1982, the government of andhra pradesh, in consultation with the reserve bank of india, hereby makes the following rules. This act will extends to whole of india except the state of jammu and kashmir. The national bank for agriculture and rural development act. Other similar names to chit fund are chitty or kuri. Prize chits and money circulation schemes banning act, 1978. The state government bodies are given responsibilities for administering the chit fund business in the states. Whereas it is expedient to amend the chit funds act, 1982 central act 40 of 1982 in its application to the state of karnataka for the purposes hereinafter appearing.
Be it enacted by the karnataka state legislature in the fiftyeighth year of the republic of india as follows. An act to provide for the regulation of chit funds in the state of andhra pradesh. Many of these problems could have been avoided if, the central chit funds act, 1982 with its amendments had been implemented in. The banking companies acquisition and transfer of undertakings act. The stay order was vacated by the supreme court in 1995 and subsequently, the act came into force, after which certain regulations have been imposed in the running of chit companies in india. The marriage record sent to it by the pastor will be filed by the district registrar. These changes have become operative from the beginning of this year. It extends to the whole of india except the state of jammu and kashmir. An act to provide for the regulation of chit funds and for matters. I did good research and thought of sharing my knowled. Under the act chit fund act department of goods and. Though chit funds are governed by the central legislation, the administration of the act is. Short title and commencement 1 these rules may be called the kerala chit funds rules 2012. Notification in exercise of the powers conferred by section 89 of the chit funds act, 1982 central act, 40 of 1982, the government of andhra pradesh, in consultation with the reserve bank of india, hereby makes the following rules.
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. Since then this act has been the guiding book for all the regulators across india. An act to provide for the regulation of chit funds and for matters connected therewith. In the reference cited, sub registrars assistant registrar of chits have been authorised to act under sections 7,9,10,16,18,24,26,28,29, 30,31,34,37,38, 40,41, 46,48 and 82 of the chit funds act 1982. Accordingly, the chit funds amendment bill, 2018, inter alia, proposes a the use of fraternity fund also for chits by amending sections 2 b and 11. Oct, 2017 chit fund companies are governed by chit fund act 1982 and rbi has specifically exempted from its core provisions. Copies of chit agreement to be given to subscribers. Full text containing the act, chit funds act, 1982, with all the sections, schedules, short title, enactment date, and footnotes. According to the definition given by chit funds act 1982, chit means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money or a certain quantity of grain instead by way of periodical installments over a definite period. Prohibition of transacting business other than chit business by a company. Chapter iii deals with the rights and duties of foreman. In exercise of the powers conferred by subsection 3 of section 1 of the chit funds act, 1982 40 of 1982, and subsection 2 of section 1 of the chit funds amendment act, 2001 10 of 2001, the central government hereby appoints 15th june, 2004, as the date on which the said provisions of those acts shall come into force in the state. However, the respective state governments appoint them under section 61 of the chit funds act. Chapter ii of the act deals with registration of chits, commencement and conduct of chit business.
Andhra pradesh chit funds rules, 2008 bare acts live. Regulator of chit funds is the registrar of chits appointed by respective state governments under section 61 of chit funds act. Zayd chit funds indias 1st interestfree chit funds. Delegation of powers to compound offences under chit fund act, 1982. Chit fund companies are widely famous with their name known as committee. The andhra pradesh chit funds act, 1971 the andhra pradesh chit funds act, 1971 act no.
Notification in exercise of the powers conferred by section 89 of the chit funds act, 1982 central act, 40 of 1982, the government of andhra pradesh. The state had enacted the ap chit fund act1971 and regulated the business. Chit funds in india are governed by the chit funds act, 1982. The chit funds ka rnataka r ules, 1983 chit funds act 1982 defines a chit fund company as a company which conducts, manages and supervises a chit fund scheme. Twentysecond dear of the republic of india as follows. Due to the rigid provisions of the 1975 kerala chitties act, many fund. Oct 04, 2011 however, the state acts may override certain provisions as deemed necessary.
The chit funds amendment bill, 2019 was introduced in lok sabha on august 5, 2019. The act defines chit as any deal or transaction which can be called in different names like chit, chit fund, kuri or chitty and persons enter into contracts specifying that all of them shall contribute an amount or even grain instead of money. Be it enacted by parliament in the thirtythird year of the republic of india as follows. The regulator of chit funds is the registrar of chits. According to section 2b of the chit funds act, 1982. Chit funds act, 1982 bare acts law library advocatekhoj. In the chit funds act, 1982 hereinafter referred to as the principal act, in section. Chit funds act, 1982 in 1982, the ministry of finance enacted the chit funds act to regulate the sector. According to this act, chit fund businesses can be registered and regulated only by the respective state governments. Sahakara sindhu department of cooperation, government of karnataka. Government of kerala taxes c department notification g. I an act to provide for the regulation of chit funds in the pstae of tamil nadu.
The chit funds act, 1982, is within the leigislative competence of the parliament. Short title, extent and commencement 1 this act may be called the chit funds act, 1982. Central act, 40 of 1982, the government of andhra pradesh, in consultation with. U65992ka2011ptc061044, and is registered by the government of karnataka under the chit funds act, 1982. Below are the important findings and must known points of the chit fund act 1982. As per section 2 b of the chit funds act 1982, chit means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money or a certain quantity of grain instead by way of. Registration of firms under indian partnership act, 1932. Statement of objects and reasons 1a conventional chit. A transaction is not a chit within the meaning of this clause, if in such transaction. At the central level, the chit funds act 1982 governs chit funds. Appointment of authorities under chit fund act, 1982. The chit funds act 1982 indian bare acts india bare act. Section 2b of the under chit fund act 1982 defines chit as.
The bill also proposes to amend a section of the act to remove the ceiling of rs100 set in 1982 at the time of framing the chit funds act, which has lost its relevance, the release said. Chit funds chitty kuri miscellaneous nonbanking company. Whew it is expedient to provide for the regulation of chit funds in the tstate of tamil. An act to provide for the regulation of chit funds in the pstae of tamil nadu. Amended chit fund act brings tighter norms, transparency. The law governing and regulating the business of chit fund in india is the indian chit fund act, 1982 herein after referred to as the act. The hindu quoted that there are almost 193 registered chit funds which are operating in bangalore and registered under the chit fund act 1982. Chit means a transaction whether called chit, chit fund, chitty, kuree or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money or a certain quantity of grain instead by way. Credit associations pdf, williams college, archived from the original pdf. 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. A project report on cutomer attitude towards investing in. Recently, while working with one of my clients, i was introduced with the concept of chit funds.
Control and regulation of chit fund companies under chit funds act, 1982. In exercise of the powers conferred by section 89 of the chit funds act, 1982. In view of the above, it has been decided to amend the chit funds act, 1982. Be it enacted by parliament in the sixtyninth year of the republic of india as follows. Central chit fund act chit fund companies bangalore. The turnover of all these are estimated to be around rs. Under this act, the chit fund businesses can be registered and regulated only by the respective state governments. Whew it is expedient to provide for the regulation of. The chits funds act, 1982 be it enacted by parliament in the thirtythird year of the republic of india as follows. Government of kerala taxes c department notification. 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.
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