Chit Funds Act, 1982

This 2025 edition of The Chit Fund Act, 1982 (Act 40 of 1982) reproduces the statute verbatim and incorporates the latest tweaks introduced by the Chit Funds (Amendment) Act, 2019 (41 of 2019, dt. 5-12-2019) together with the territorial update under the Jammu & Kashmir Reorganisation Act, 2019 (34 of 2019, w.e.f. 31-10-2019).

The volume also binds in:

• Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (as aligned by the 2019 amendment)

• Delhi Chit Funds Rules, 2007 (notification No. F. 10(16)/Fin.(T&E)/2007-08, as amended till 17-3-2011)

Concise short comments follow pivotal sections—flagging the 2019 increase in foreman commission (from 5 % to 7 %), mandatory “chit” prefix for advertising, e-registration of chit agreements, and relaxation for the use of digital payment modes—while preserving complete Bare-Act integrity for examinations and authoritative citation.

Core statutory coverage

• Formation & registration—minimum capital, security deposit, electronic filing with Registrar of Chits, and model-bye-laws.

• Conduct of chits—auction/lot procedures, notice periods, bidder eligibility, and online draw transparency norms.

• Rights & duties of the foreman—commission ceilings (post-2019), lien on prize amount, and substitution of defaulting subscribers.

• Rights of subscribers—prize-money entitlement, dividend distribution, transfer of tickets, and arbitration of disputes.

• Inspection & winding-up—audit mandates, Registrar’s suo-motu inquiry, and winding-up on fraud or persistent default.

• Offences & penalties—enhanced fines, imprisonment for unauthorised chit business, and seizure of misleading advertisements.

• Ban on prize chits / money-circulation schemes—blanket prohibition under the 1978 Act, with criminal-law consequences.

This edition is particularly suited for

• AIBE candidates and law students specialising in banking, NBFC, and financial-fraud legislation.

• Chit-fund companies, foremen & compliance officers ensuring registration, security deposit and conduct-of-business compliance.

• Subscribers, investor-associations & consumer-rights NGOs monitoring fair-practice norms and grievance redress.

• Regulators, police-economics wings & auditors handling inspections, prosecution and winding-up actions.

• Policy researchers & journalists tracking informal-finance, grassroots-saving mechanisms, and anti-ponzi measures.

Exact Gazette text · pinpoint explanatory notes · zero superfluous commentary—your fastest route to clarity, authenticity and practical insight on India’s chit-fund regulatory regime.