Which of the following statements is are correct regarding CHIT funds 1 It is a type of collective i...........

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Which of the following statements is/are correct regarding CHIT funds?

1. It is a type of collective investment scheme.

2. It can’t be run by an individual.

3. Chit funds are regulated by state government only as it is mentioned in State List.

Select the correct answer using the code given

below:

1 Only

3 Only

2 and 3 Only

1 and 3 Only

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Explanation:

A chit fund is a type of rotating savings and credit association system practiced in India. Chit fund schemes may be organized by financial institutions, or informally among friends, relatives, or neighbors. In some variations of chit funds, the savings are for a specific purpose. Chit funds are often microfinance organizations
Statement 1 is correct: CHIT fund is a type of collective investment saving.
Statement 2 is incorrect: This scheme can be run by an individual or an institution.
Statement 3 is incorrect: As per Supreme Court, chit funds lies in the concurrent list NOT in state list i.e. regulated by both state and centre. The Prize Chits and Money Circulation (Banning) Act 1978 defines the illegal unregistered chit funds.