இந்தியாவில் வங்கிகளை எளிதில் அணுக முடியாத லட்சக்கணக்கான மக்களின் நிதி ஆதாரமாக சிட் ஃபண்ட்கள் திகழ்வதாக மார்கதர்சி சிட் ஃபண்ட் நிர்வாக இயக்குநர் ஷைலஜா கிரண் பெருமிதம் தெரிவித்தார்.
00:00I'm very honoured to be here this morning to share the dais with all of you and also to represent what the industry is going through and what is it that we really need to grow in this industry.
00:14And Praveen Garu explained at length how Chitphan industry has been the backbone for several years to many big industrialists, but the truth is that it has led to the survival of the common man, the small and middle class people, the farmers and traders by and large.
00:41We all know that Chitphan is the oldest indigenous financial institution.
00:50They uniquely combine savings and borrowings and have become a lifeline of financial inclusion for millions who lack easy access to banks.
01:03Despite their significance, the industry faces regulatory and operational challenges that need urgent redressal.
01:13Chitphans are not just a financial tool, they are a community institution rooted in trust, serving rural households, small and medium entrepreneurs and urban residents alike.
01:27Our task today is to explore how we can safeguard this legacy while modernizing for the future.
01:37The key challenges and proposed solutions, we have a section 16 in the act and I'm delving more with the act since we have all the IS officers whom we can let them know what the difficulties are and how they can help us out.
01:59I believe, sir, the act which was a 1982 act predominantly was made to serve companies which just had not even companies, maybe individuals who are running the Chitfund companies, just having one Chit that they were operating.
02:21But today, number of proprietors have turned firms and limited companies and many companies are conducting probably more than 20 groups, 50 groups, 100 groups and we at Mark Darcy have more than close to 6000 groups going on amidst all the four state operations that we do.
02:43Sir, it is time that we really look into the act because our country which is aspiring to become the third largest economy in the world, out beating even Japan, I think almost one day we cross their GDP and probably every other day we are both competing there.
03:08But crossing even Germany and trying to be the third economy by 2030 and India being a bustling nation of billions of digital transactions, why only Chitfund industry is left behind, sir?
03:26So we kindly request you to look into it and help us out so that we can, we can also be as an industry be given fair chance to survive in this digital world.
03:39So section 16 talks about in every auction, two subscribers being present.
03:46These days nobody has time, they all want to operate electronically.
03:51So if this can be changed to digital participation, you know, where people can participate online auctions, it will help the subscribers and reduce the operational burden.
04:05In fact, in fact, in the last two, three auctions, nobody is there to participate at all.
04:12So how can we expect anybody to be present?
04:15So the act itself is, is violative for the last auction because last auction there will be only one person.
04:24So how can two people be present in the auction?
04:27So when it comes to section 20, sir, it talks about 50% fixed deposit and 50% bank guarantee, which also becomes operationally inconvenient.
04:42We would prefer probably 50%, not 100%, the AP government, the AP state had 50% its security deposit until the Central Act was enacted.
04:58So if we can recall that, and make it 50% fixed deposit, and that too, instead of taking the, at the time of taking the price sanction,
05:12price sanction from the registrar, if it can be at the time of the commencement, then it will ease on the liquidity of the chit fund companies,
05:21and they would be able to make faster payments to the subscribers, sir.
05:28And when we look at the section 20, subsection 5, it talks about where a chit is terminated and the registrar has satisfied himself,
05:42that claims of all the subscribers have been fully satisfied, he shall order the release of the security furnished by the firman.
05:49The current issue is, sir, lack of clarity delays release of security when subscribers don't claim price amount.
05:58Very rarely we conduct, like say, maybe 25 chits, there will be one subscriber who is not able to give the security.
06:06And since the security, we cannot release the price amount. Such price amounts get transferred into number 2 account, and it is there.
06:15And we only adjust that amount towards the arrears in that chit once in 6 months.
06:21And if there is any credit left after the chit is terminated, we make the payment to the subscriber.
06:27So this can be looked into by the registrars and release our fixed deposit amount once the chit is terminated.
06:37Because a subscriber who has not taken the price amount will not be giving us the no-claim letter.
06:43So there is no way we can produce a no-claim letter of an unpaid price subscriber.
06:49And we would like to follow the act in total in order to be 100% compliant.
06:58So balance sheet, you know, the company's act itself gives 6 months.
07:03Whereas in the chit fund rules, it says balance sheet should be filed within 3 months.
07:10Which is so unfieldy to do because the bankers themselves with whom the fixed deposits are kept, you know, they don't give us the receipt information, the interest postings until it is June.
07:27So once we get the information, we have to verify all that and then there will be some wrong postings.
07:34We have to get that rectified.
07:35All of that has to get reflected in the, you know, in the balance sheet.
07:40So this year we really struggled to see if we can complete it in 3 months.
07:45Day and night our accounts team has worked in all the 4 states.
07:50But still, you know, it took 5 months.
07:53So we are able to comply with the company's act wherein 6 months time is given.
07:58So something needs to be done about this also, sir, so that it reduces compliance stress and harmonizes regulations.
08:06And largely the other bottlenecks are still being very much manually compliant with regard to documentation.
08:18Lot of manual filings are there, which we would like to go forward with digital compliance, which makes it easy.
08:27You know, even the registrar would know everything online.
08:33There will be dashboards which can be seen by the registrars.
08:37Everything will be much more transparent is what I believe in.
08:41And Mark Darcy Chit Fund is totally moving towards digital operations.
08:46Another bottleneck is the delayed security deposits, release of them.
08:53Sometimes, even after 3 months, 6 months, they are not released, which tightens the financial situation of a Chit Fund operator.
09:02And prolonged legal disputes, which hampers the efficiency.
09:07One of the reasons why probably very rarely not organized Chit Funds, of course, this can happen only to organized Chit Funds.
09:17Very, very, very rare because the percentage is almost nil.
09:21But it can go wrong because of not able to recover rather than doing business.
09:27If anybody fails, it is because of failure to recover the dues from the defaulted subscribers.
09:34So, the most important thing is, sir, about the GST rationalization.
09:44Why are Chit Funds being charged 18% when banks, you know, NBFCs are not charged anything on the interest earned by them?
09:55For us, the income is the commission and for banks and NBFCs, it is the interest.
10:01There is no GST charged for that.
10:04But whereas we are being charged 18%, which is, you know, looking at us like apples and oranges, differentiating us like apples and oranges.
10:14So, kindly, sir, we seek your intervention, we seek your help in rationalizing this and making it impartial, sir.
10:25And also, people like Mark Darcy, firms like Mark Darcy, where we are operating in different states, we have different rules, every state, different fee structure, different practices, which create inefficiencies and procedural hurdles.
10:44So, to develop a model Chit Fund rules for nationwide adoption to bring in consistency would be the best.
10:52These challenges affect not just businesses, but the very trust of subscribers who look to Chit Funds as their safety net.
11:00Digital transformation, the requirement of physical submissions for regulatory approvals, I am just insisting upon that, slows down group commencements, reduces ease of doing businesses.
11:15Introduce secure e-filing for chit agreements, minutes, returns and fees, along with online payment facilities to reduce cycle time, improve compliance and enhance transferences.
11:29Promote online auctions and digital collections for convenience and trust.
11:36I have covered about the judicial disputes, I will skip that.
11:42Just one thing is, you know, when defaulted subscribers are going for appeals, please insist upon at least 25% remittance,
11:58so that frivolous litigation can be avoided.
12:02I lost it on my iPad, so I am just looking up here.
12:06And also we need to curb unethical competition, so proliferation of unregistered Chit Operators,
12:13undermines trust, exposes subscribers to the risk of losing their savings and damages,
12:20confidence in the entire regulated industry.
12:23So, curbing unregistered operators is very, very important.
12:28Strict enforcement, penalties when people are found to be operating unregistered Chits,
12:34and ringing about public awareness campaigns to protect subscribers from fly-by-night operators.
12:41So, we have huge opportunities ahead.
12:44Beyond addressing challenges, the sector is poised for growth if supported by enabling policies.
12:52Financial inclusion reach undeserved segments with simple community-based Chit groups,
12:59which can be operated in rural areas and inculcate a saving culture.
13:04Promote Chit Funds as a disciplined savings tool for the younger generation.
13:11As I conclude, sir, Chit Funds are at a crossroads.
13:16Over-regulation and unfair competition currently impede growth,
13:21and targeted reforms and modernization can unlock the sector's full potential.
13:27By embracing digital transformation, ensuring regulatory balance,
13:33and curbing unregistered operators, Chit Funds can emerge stronger than ever.
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