ALL INDIA ASSOCIATION OF CHIT FUNDS
Annual General Meeting, Chennai
28th September 2019, Saturday at 11AM
Venue: Madras Management Association
No. 240, Pathari Road, Chennai – 600006
All India Association of Chit Funds is a National Body representing members from the entire Union of India. The volume of business of the Registered Chit Fund companies is estimated to exceed Fifty Five Thousand Crores as of now.
Shri. S. Gurumurthy,a Chartered Accountant. by Profession, Columnist, Political and Economic Analyst& Director of RBI Central Board,the Chief Guest for the occasion covered the following subjects in his address.
- Ways and means to make this indigenous savings instrument more popular, particularly among the younger generation.
- Imparting the knowledge of chit funds to the students of Economics,
Commerce, Management etc in the Educational Institutions.
- How the transition can be planned to take the business smoothly from one generation to another
- Misconception about chit funds in the minds of Government Officials and the media.
- Every country has created its own practices which suites them best model of business with works for them, it is not copied from how it
- Today NBFC is accepted by the necessary part of the system even the RBI recognised it and encourages it. Once it was considered as not required.
- Make chit funds as a “financial product” instead of how it was seen in the past as unorganised.
- Shri.S.Gurumurthy said during questions from the press, that “the merging of various public sector banks in 6-7 banks is good move, as it not only strengthens banking in India but also create a new platform for NBFCs to play a vital role in small financing areas”
The Association of Chit Funds placed the following concerns put across before Shri S. Gurumurthy
- Amendment of the Chit Funds Act. Bill pending in Lok Sabha.
- The large scale concessions and exemptions given by Kerala Government to KSFE make it very difficult for Private Chit Fund companies to carry on business in Kerala. Private Chit Fund companies should be given a level playing field.
- To exempt Chit Fund services from the levy of GST. GST increases the cost of funds to the borrower and reduces return on savings to the saver.
- In the absence of a specific classification to Chit Funds by the RBI, we are often clubbed with other NBFCs.To classify chit funds under a separate category of “NBC – Chit Funds” as it has been done the case of MFIs.
It came out during the deliberations that Chit funds have a huge role in the National Economy to reach out to those segments, which are not catered to by the banking sector.
The Second Speaker, Shri Suresh Ramanujam, is the Co-Founder of Metis Family Office Services Pvt Ltd. based in Chennai. He has more than 25 years of experience in the financial services industry where he has been dealing with family businesses in terms of providing banking credit facilities, managing wealth, helping them raise private equity, structuring JVs, mergers & acquisitions etc. spoke on the subject “How to leave an enduring legacy”
Since roping in the next generation and bringing in professionalism is a concern for many of the chit fund companies which are owner driven, Mr. Suresh came out with many practical suggestions to innovate working models of chit funds and image building process, as the perception of chit funds face a great challenge today.
The Third Speaker, Shri. Raghavan Ramabadran, a Chartered Accountant-turned-Lawyer currently headingthe Direct Tax and Indirect Tax practices at Chennai of the law firm Lakshmikumaran& Sridharan, handles corporate litigation matters before High Courts.Raghavan Ramabadran has worked extensively in both Advisory and Litigation
verticals of the firm during the past 15 years. He has also led teams in conducting tax compliance reviews and GST Implementation studies for many companies including Navratna companies and Fortune 500 companies.
GST has affected the growth of the Chit fund industry, in particular the services rendered to the MSME segment. Chit Fund, basically being a savings instrument, the question whether GST was hindering or augmenting the financial inclusion wasdebated.
The following conclusions were drawn before winding up the seminar
- To initiate steps to increase the awareness of Registered Chit Funds and how they are different from other deposit taking and Multi Level Marketing Schemes
- To take up necessary steps to raise the issues placed before Shri. Gurumurthy with the government in order to improve the ease of doing business
- To take up the issue of GST with Ministry of Finance andseek Exemption of GST on Chit Fund Services.
- It was also decided to engage more professionals to innovate more Chit fund models.
Business Excellence Award was presented to Smt. Sailaja Kiron, the Managing Director of Margadarsi Chit Fund P Ltd., Hyderabad by the Chief Guest Shri . S. Gurumurthy for having achieved the highest business turnover of Rs. 11,500 Crore per annum and the excellent standards achieved in doing chit business.
President General Secretary
RSVP: Sreehari – 9840398470, 9176808825