The Risk

Consumer Voice - - Bfsi -

• The big­gest risk is mis­use of pooled funds by pro­mot­ers. The other is de­fault by sub­scribers, af­fect­ing the promised fund dis­tri­bu­tion.

• Var­i­ous state and cen­tral laws reg­u­late only the reg­is­tered chit funds. There is no re­dress if you fall prey to an un­reg­is­tered fund.

• The min­istry of cor­po­rate af­fairs has an ex­haus­tive list of reg­is­tered chit funds (there were 5,412 chit­fund com­pa­nies in In­dia as on 31.12.2013 – www.mca.gov.in); how­ever, as many chit funds get un­listed reg­u­larly, you may not be able to find the lat­est list. Do your re­search.

• Only in­vest in a chit fund if you are con­fi­dent that you will be able to com­plete all the monthly con­tri­bu­tions, or you may end up pay­ing a penalty.

• The cur­rent laws of­fer lit­tle scope of re­cov­ery in case of a scam.

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