Chit fund firms moot self regulatory body

The chit fund companies across the country are planning to form a self regulatory system to monitor their performances, rectify any shortcomings and to settle disputes.

A resolution to this effect was passed during the golden jubilee celebrations of the Tamil Nadu Chit Fund Companies Association here on Sunday. The mechanism will be on the lines of the regulatory bodies like the Institute of Chartered Accountants of India.

Talking to mediapersons, M Krishna Barathy, secretary of the association, said the association was preparing the draft in consultation with financial experts and legal pundits.

"It should get the nod from the Union government. The association is in talks with the Reserve Bank of India and Union finance ministry. The RBI has suggested forming a self-regulatory mechanism for chit funds rather than depending on an external agency to look into the affairs," he said.

In the resolution, the association urged the Union government to ensure that all the states and Union territories implement the Chit Funds Act, 1982. Though it was more than two decades since the enactment of the law, ten states, including Delhi, Andhra Pradesh and Madhya Pradesh are yet to implement it.

The association also sought the speedy disposal of the cases handled by the appointed arbitrators. It has urged both the Centre and the state governments to take immediate steps to ensure s regular supply of stamp papers.