LOCHAN CHIT FUNDS PVT. LTD. The First Chit Company in Bangalore South Taluk, Bangalore Dist floated to promote Mega Chit operate various denominations of chit groups as per the provisions of ‘The Chit Funds Act 1982’ and is a “Legalized Chit Company” Since 1999.
The Government of India passed in parliament an enactment called ‘The Chit Funds Act 1982 in 1984. The act came into existence in the State of Karnataka from 26.01.84. The act is a uniform enactment, common throughout the Indian territory.
SAILENT FEATURES OF THE CHIT FUND ACT 1982
- No person, firm or company can operate chits without obtaining a ‘licence’ from the register of Chits.
- The company conducting the chits must deposit by way of Fixed Deposit with the Registrar of Chits an amount equal to the Chit value proposed to be conducted by it. Only then permission to start the Chit Group will be granted.
- There is ceiling of Bid/Auction for the chit to a maximum of 40% percent of the Chit Value & minimum of 5% percent.
- The Registrar of chits Karnataka is a supervisory body which controls and governs the operation of Chits.
- The various section of the Chit fund Act Karnataka, clearly define all aspects of operation of chits and hence there is no possibility of loopholes, contravening or circumventing the Chit Fund Act.
- Along with the control executed by the Registrar of Chits, the Registrar of Companies & Reserve Bank of India also have control and regulatory laws to check unlawful activities of unscrupulous operators.
- The maximum commission permitted to Chit operators is limited to only 5% percent as per Karnataka Chit Fund Act 1982.
CHITS & BENEFITS:
A Chit provides good source of finance not only savings to salaried, House holders, employees but for different types of people Viz., small investors, businessmen, small scale industrialists etc.
It also provides a means of savings for contingencies. A Chit is, therefore a good Low, Medium, High Class persons desirous of saving as well as people who like to borrow / Investment to meet expenses on special occasions like marriages construction of house etc.., and funds for business or industry...like any other needs
A person can choose a suitable chit group depending on his capacity to provide extra funds, month after month. The potential to pay regularly is the important criteria to choose a suitable chit group.