The recent chit fund fiasco in West Bengal has not only worried a lot of depositers, but chit fund managers as well.
According to the Tamil Nadu Chit Fund Companies Association (TNCFCA), in the wake of recent scams involving deposit schemes being misreported as chit fund scams, it has become very difficult for the industry to convince people to join chits. In a press meet here on Friday, the association appealed to the people of the State not to confuse ‘Ponzi Schemes’ that offer unaaffordable interest rates, cash prizes and gift articles for deposits with chit funds, which are regulated by Miscellaneous Non-Banking Financial Companies.
Speaking to City Express, T S Sivaramakrishnan, general secretary, All India Association of Chit Funds, New Delhi, said, “There are more than 10,000 chit fund companies registered with us. In Tamil Nadu alone, around 2,000 registered chit fund companies are operating. These companies come under the Chit Fund Act, 1982 and are duly regulated by State governments with their own set of rules. The RBI acts as a principal regulator of this industry”.
Y S Mathivanan, president, TNCFCA, said, “Whenever there is a financial scam, it is erroneously attributed to chit fund companies. We have been misconstrued. This will result in discouragement of investors. Hence we appeal to the people not to confuse us with finance companies that cheat depositors with highly regulated chit funds.”