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Chit funds and its working

Discussion in 'Money Matters' started by kavithavel, Jan 7, 2010.

  1. kavithavel

    kavithavel Senior IL'ite

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    Hi,

    Can someone explain the working of chit funds???
    How do we invest??what do we get in turn???what laibilities are laid in investing???


    Love,
    Kavitha.
     
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  2. raagini

    raagini Silver IL'ite

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    let me give link to an article at wikipedia Chit Fund as it has the required information :)
     
  3. natpudan

    natpudan Gold IL'ite

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    kavitha,

    raagini's link does give an explanation to your question.

    Can someone explain the working of chit funds???

    they work for few months or years & most of them vanish.

    How do we invest??

    if it's a chit scheme - monthly

    if in a chit fund - deposit lumpsum

    what do we get in turn???

    pattai naamam, thiruppathi laddu, thirunelveli alwaa. majority of them have done this.

    what laibilities are laid in investing???

    all that you invested is at stake.


    i don't deny the fact that there may be certain reliable ones. but it's worth not taking the risk.

    the hard earned money, the money set aside for an objective like building a house, children's education, marriage, etc. will all be wiped out for the interest in obtaining higher interest rates.

    be with the banks so that your principal is safe and get little lesser interest.

    with the chit funds, the money is lost & as well the objective.


    if you are planning to start a chit fund, then you will become a millionaire shortly, but in case of a complication, you wind up then you will be on the run with the million.
     
    Last edited: Jan 7, 2010
  4. SriVidya75

    SriVidya75 Platinum IL'ite

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    Natpudan

    Well said dear! some how I am always against this investing in Chit funds ...its more of a cheating business and never know over night anything might happen. Lucky are those who are able to successfully get teh money return back
     
  5. natpudan

    natpudan Gold IL'ite

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    thanks srividya.

    my father-in-law when he retired, without telling any of us he put all his money in a chit fund. nobody knows how much & in which chit fund he deposited.

    that was the time when a series of chit funds went bust in chennai.

    pity the chit fund in which he deposited also went bust. he had a mild heart attack.

    the pain he underwent other than the heart attack was terrible.

    he was in an ordinary job & after 40 years of hard work he had earned that money.

    more than the loss of the money, it's the shame, foolishness and the iyalaamai to take any action by us, the government kills.

    we supported him, but he wanted to be independent even after retirement. that objective was defeated by his shear foolishness. none of us ever asked him anything about it. but every day he must have been repenting for that & couple of years later passed away.

    i am writing this on the belief that people who read this would benefit from this.
     
  6. shakambari

    shakambari Platinum IL'ite

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    Let us share our FINANCE COMPANY woes here...

    Hello!

    So many of us /or our near and dears lost hard earned money and savings

    in so many Fly by night Finance Comapnies/Benefit funds/Nidhis etc.

    Let us share our stories -

    The purpose of this thread is not to just lend a shoulder to cry on-but to

    find out if something good is happening somewhere for investors-bcoz

    after some years we just forget our money and move on with life.

    My b.i.l. and his inlaws had invested more than 5L in RBF and lost it .They

    got a few tiny instalments back-after that no action...

    My uncle lost some money in teak crops and got nothing back...
     
  7. Shanvy

    Shanvy IL Hall of Fame

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    Venkat

    sorry to hear about your FIL. sitting in chennai, and being a news buff, i see one scam that gets unfolded every week.

    I know many who lost their hard earned money. but there are people who still go into all this.

    recently have you heard of this JBJ group developers, they were everywhere marketing plots. yesterday's news was that there was a 1000cr scam.

    people fall into these scams without thinking. they never sit and think, how can a company give more than 8 or 9% when the whole market is reducing the interest rates. a little bit of caution would go a long way.

    as long as greed rules,and gullibility is there, these scams are here.

    just google for chit fund scams and you will find many prominent directors, and many other vips, helping in the same...
     
  8. Shanvy

    Shanvy IL Hall of Fame

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    <link rel="File-List" href="file:///C:%5CDOCUME%7E1%5CWelcome%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml"><o:smarttagtype namespaceuri="urn:schemas-microsoft-com:eek:ffice:smarttags" name="City"></o:smarttagtype><o:smarttagtype namespaceuri="urn:schemas-microsoft-com:eek:ffice:smarttags" name="place"></o:smarttagtype><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:punctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> </w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" LatentStyleCount="156"> </w:LatentStyles> </xml><![endif]--><!--[if !mso]><object classid="clsid:38481807-CA0E-42D2-BF39-B33AF135CC4D" id=ieooui></object> <style> st1\:*{behavior:url(#ieooui) } </style> <![endif]--><style> <!-- /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman";} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} --> </style><!--[if gte mso 10]> <style> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} </style> <![endif]--> Shakambari,

    I think you will come to know about the yellow list of rbi, (not sure if it yellow, have to confirm from dh) where in, most of the funds/companies that went bust get listed or if they are in the radar. you can take a cautious decision.

    infact, we could save a few of our friends, when we came to know about the list ahead of the happenings. as dh was working closely with banks and was into forex 12 years back.

    the list of companies that went bust..

    RBF,
    Anubhav Plantations, <st1:city w:st="on"><st1:place w:st="on">Sterling</st1:place></st1:city> also had some teak plantation scheme i think. last heard, that anubhav was working out something..not sure of the news..just came across in the breeze.
    Ramesh cars (?)
    devi gold house(?)
    there was one more gems and jewel, who also built a big showroom in tnagar, but went bust..name eludes.

    the companies that are working decent, but still with complaints,

    shriram chit funds. has been in the news sometime back for insider bidding..


    That is the reason i always say, take a check of your risk taking capacity and invest accordingly.
     
    Last edited: Jan 9, 2010
  9. SriVidya75

    SriVidya75 Platinum IL'ite

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    I can totally understand the pain your FIL might have felt. Hard earned money and that too in hands of such unknown people.

    My parents do keep pursuing me and even my FIL also invested some amount in chit funds..but some how I am totally not for it..no idea why..but I dont trust those chit funds..

    Hope things are fine with your FIL...and yes you really helped alot by sharing your experience:bowdown
     
  10. natpudan

    natpudan Gold IL'ite

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    he passed away 2 years before - repenting his foolishness.

    in reality i think he has gone up to recover the money.

    but if hell & heaven exists, he will be in heaven - he is such a nice person, and these chit fund guys will be in hell when they go up and he can not recover there as well, because he can't meet them!!!!!!
     

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