With reference to the chit Fund business in India Consider the following statements 1 Chit fund is a...........

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With reference to the chit Fund business in India, Consider the following statements:

1.Chit fund is a type of saving scheme where each subscriber is entitled to a prize amount determined by lot, auction or tender depending on the nature of the chit fund.

2.In India chit funds are governed by various state laws since it has been placed in the state list of seventh schedule of Indian constitution.

3.Since chit funds accept deposits like other commercial banks, RBI regulates the chit fund business in India.

Which of the statements given above is/are correct?

1 only

2 and 3 only

2 only

1, 2 and 3

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Explanation:

1 only

Statement 1 is correct. A chit fund is indeed a type of saving scheme where each subscriber contributes a certain amount regularly and one member, selected by auction or lottery, gets the entire collected amount.

Statement 2 is incorrect. While chit funds are indeed governed by various state laws, they are not exclusively placed in the state list of the seventh schedule of the Indian constitution. They are regulated by both state and central laws.

Statement 3 is incorrect. Chit funds are not regulated by the Reserve Bank of India (RBI) since they do not accept deposits like commercial banks. Instead, they are regulated by state laws and the Chit Funds Act of 1982 at the central level.

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