Consider the following statements 1 Chit funds are the illicit deposit schemes which works based on ...........

Economic Affairs Money Supply and Monetary Policy

Consider the following statements:

1.Chit funds are the illicit deposit schemes which works based on a pyramid structure to provide a highest rate of return.

2.Recently the Unregulated Deposit Schemes Act bans all the illicit deposit schemes including the chit funds.

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

Neither 1 nor 2

Chit funds are not necessarily illicit deposit schemes. Chit funds are legal financial entities that operate as a form of savings and borrowing, organized by a group of people.

The Unregulated Deposit Schemes Act is aimed at regulating and banning unregulated deposit schemes, not necessarily chit funds. Chit funds are regulated by state laws and fall under the purview of the Chit Funds Act, 1982.