Under the chit fund act of 1962, businesses can be registered and regulated only by the respective state governments. Sep 22, 2018 chit funds act 1982 ebook download full text containing the act, chit funds act, with all the sections, schedules, short title, enactment date, and footnotes. 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. The chit funds act 1982 the chit funds act 1982 central act no. Oct 04, 2011 however, the state acts may override certain provisions as deemed necessary. At present chit funds are governed by chit funds act of 1962, rbi act of 1934, and sebi act of 1992 etc. In the chit funds act, 1982 hereinafter referred to as the principal act, in section 2, in clause b, after the word kuri, the words, fraternity fund shall be inserted. Section 2b of 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 by way of periodical instalments over a definite period and that each such subscriber. 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. In some variations of chit funds, the savings are for a specific purpose.
Chit funds chitty kuri miscellaneous nonbanking company. An act to provide for the regulation of chit funds and for matters connected there with. 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. Chit funds act 1982 defines a chit fund company as a company which conducts, manages and supervises a chit fund scheme. The chit funds act, 1982 and delhi chit funds rules, 2007 maharashtra. 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 chit funds act, 1982 was enacted to provide for the regulation of chit funds and for matters connected therewith. Chit fund act 1982 is a central act to provide for the regulations of the chits fund business and for the matters related thereon. I was aware of sarada chit fund scam but not completely aware of working behind the chit fund. Chit funds are the indian versions of rotating savings and credit associations found across the globe. Provided further that before chit funds act 1982 to register a chit under the first proviso, the foreman shall be given a reasonable opportunity of sct heard. Each month, the subscribers put in their monthly installments into the pot.
Under this law, registration of the chit fund business can be done only by the respective state it prohibits a fund from being created without the prior sanction of the state government. According to section 2b of the chit funds act, 1982. Organised chit fund schemes are required to register with the registrar of firms, societies and chits. Copies of chit agreement to be given to subscribers. In view of the above, it has been decided to amend the chit funds act, 1982. 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. Prize money summation of all periodic collections minus maximum bidding amount m aximum bidding amount is inclusive of foremans commission for a particular chit fund scheme there is a chit group which has fixed number of investors. Chit fund act1982 is a central act to provide for the regulations of the chits fund business and for the matters related thereon. An act to provide for the regulation of chit funds and for matters. Chit fund a chit fund is a type of rotating savings and credit association system practiced in india chit fund schemes may be organized by financial institutions, or informally among friends, relatives, or neighbours. The chits funds act,1982 be it enacted by parliament in the thirtythird year of the republic of india as follows.
Statement of objects and reasons 1a conventional chit. Government of kerala published the chit fund rules 201204062012 notification government order nog. 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. The draft bill gives them more freedom to regulate such funds. The 1982 act regulates chit funds, and prohibits a fund from being created without the prior sanction of the state government. Be it enacted by parliament in the seventieth year of the republic of india as follows. The chits funds act,1982 statement of objects and reasons 1a. Chit funds act, 1982 in 1982, the ministry of finance enacted the chit funds act to regulate the sector. 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. However, the state acts may override certain provisions as deemed necessary. Under the act, the central government can choose to notify the act in different states on different dates.
Act, no person shall start or conduct any chit unless he has registered with the. Definition of chit fund 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. It is also changing the 1982 law to allow eauction of chit funds. Central government has not framed any rules of operation.
Received the assent of the president on the 22nd june 1 961. May 23, 20 chit funds act, 1982 in 1982, the ministry of finance enacted the chit funds act to regulate the sector. Chit funds act 1982 court karnataka judgments legalcrystal. Union government chit funds act 1982 except the state of jammu and kashmir new delhi. For firms, with four or more partners, the centre had proposed to. Chit funds chit funds act 1982 often microfinance organizations. Financial intelligence unit india, ministry of finance, govt. It is, in law, a contract between the subscribers and the. Such schemes can be conducted by organised financial institutions or may be unorganised schemes between friends andor relatives. It extends to the whole of india except the state of jammu and kashmir. Prohibition of transacting business other than chit business by a company. 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, 1982. In the chit funds act, 1982 hereinafter referred to as the principal act, in section. Be it enacted by parliament in the thirtythird year of the republic of india as follows.
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. To understand how the chit fund companies work, we must understand few terms which will be used during the process. Whew it is expedient to provide for the regulation of chit funds in the tstate of tamil. Act to override other laws, memorandium,articles,etc. An act to provide for the regulation of chit funds and for matters connected therewith. Applicability of the act as per section 85 2 of the act, the provisions of the act do not apply to any chit the amount of which, or where two or more chits were started chit funds act 1982 conducted simultaneously by the same foreman, the aggregate amount of which does not exceed inr disputes relating to chit business. I an act to provide for the regulation of chit funds in the pstae of tamil nadu. The current bill says chit fund schemes operated by individuals can raise a maximum of rs3 lakh, up from the existing rs1 lakh. 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.
State government chit funds fall in the concurrent list and states are free to issue their own law. Accordingly, the chit funds amendment bill, 2018, inter alia, proposes a the use of fraternity fund also for chits by amending sections 2b and 11. As per one definition, a chit fund company is the one which manages, conducts or supervises, as foremen, agent or in any other capacity, chits as defined in section 2 of the chit funds act, 1982. I did good research and thought of sharing my knowled. Central chit fund act chit fund companies bangalore. 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. Aug 26, 2016 definition of chit fund 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. The chit funds act 1982 indian bare acts india bare act. Chit funds act, 1982 bare acts law library advocatekhoj. The chit funds in india are regulated by the chit fund act, 1982. Any person or company intends to carry chits business shall obtain prior sanction order p. 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 different acts governing the chit funds in india are.
Full text containing the act, chit funds act, 1982, with all the sections, schedules, short title, enactment date, and footnotes. Foremans commission 5% of the gross chit fund amount paid to the foreman 6. An act to provide for the regulation of chit funds in the pstae of tamil nadu. Section 2b of the under chit fund act 1982 defines chit as. Short title, extent and commencement 1 this act may be called the chit funds act, 1982. Lok sabha passes chit funds amendment bill aspirant world. Section 2b of 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 by way of periodical instalments over a definite period and that each such subscriber shall, in. Currently enforcement remains the primary responsibility of the state government. Subsection 3 of section 1 of the act, inter alia, confers powers upon the central government to appoint different dates for commencement of the said act for different states. Recently, while working with one of my clients, i was introduced with the concept of chit funds. Chit funds act, 1982 mylegalwork online legal help. Regulator of chit funds is the registrar of chits appointed by respective state governments under section 61 of chit funds act.