Chit Fund Regulations India — Complete Legal Guide 2026

Chit fund regulations india are applied at the state level. The central Chit Funds Act, 1982 sets the national framework — each state appoints its own Registrar of Chits and may frame additional rules.

chit.fund is an information portal only — we do not accept deposits or operate chit funds. Always verify an operator’s registration with your state Registrar before joining any scheme.

Chit Fund Regulations India — Chit Funds Act 1982 Central Framework

Last amended 2019
Foreman commission
Max 7%
Raised from 5% — 2019 Amendment
Max auction discount
30% of chit value
Minimum prize = 70% of pool
Chit duration
Max 5 years
Extendable to 10 yrs by state
Individual limit
₹3 lakh
Raised from ₹1L — 2019 Amendment
Firm limit (4+ partners)
₹18 lakh
Raised from ₹6L — 2019 Amendment
Draw witness
Min 2 subscribers
Video call permitted since 2019

How to verify any chit fund operator

1

Ask for the Certificate of Registration — issued by the state Registrar of Chits. Every registered operator must display this. No certificate = unregistered = high risk.

2

Request the Certificate of Commencement for the specific scheme you are joining — confirms the required security deposit has been made for that particular chit.

3

Read the Chit Agreement (Bye-Laws) — verify foreman commission does not exceed 7%, the auction process is described, and withdrawal conditions are clearly stated.

4

Cross-verify with the Registrar directly — contact your state’s Registrar of Chits to confirm the operator’s registration is current and active.

Find your state’s regulations

Tamil Nadu
3,200+ operators (approx.)
Central Act

India’s largest chit fund market with 1,500+ registered operators. State-specific withdrawal process (Form IV / IV-A). Tamil Nadu Chit Funds Rules, 1984.

TN Rules, 1984 Largest market
View guide
Andhra Pradesh
2,800+ operators (approx.)
Own Act 1971

Own legislation since 1971, predating the central Act. Separate Registrar post-2014 bifurcation. AP Chit Funds Rules, 2008.

AP Act, 1971 AP Rules, 2008
View guide
Kerala
1,900+ operators (approx.)
Own Act 1975

India’s oldest chit fund law (Travancore, 1945). Government-backed chit fund available. Locally called chitty / kuri. Kerala Chit Funds Rules, 2012.

Chitties Act, 1975 Govt. chit fund available
View guide
Karnataka
2,100+ operators (approx.)
Central Act

Regulated via Sahakara Sindhu (Dept of Cooperation). Government-backed chit fund available (est. 1966). Bengaluru is India’s digital chit fund technology hub.

Sahakara Sindhu Govt. chit fund available
View guide
Maharashtra
1,600+ operators (approx.)
State Amendment 2023

Most recently amended state (Dec 2023) — reformed the appeals process. Mumbai is the largest single-city chit fund market in India.

MH Amendment, 2023 Latest update
View guide
Telangana
1,400+ operators (approx.)
Central Act

Telangana has launched T-Chits, a blockchain-based chit fund oversight platform, making it one of the first states to use blockchain technology for chit fund administration. T-Chits is live in all ARCs. Registrar of Chit Funds: Hyderabad.

T-Chits blockchain Blockchain platform
View guide
Delhi
400+ operators
Central Act

India’s only state with a dedicated standalone Dept. of Chit Fund. Active consumer advisory portal at chitfund.delhi.gov.in.

Delhi Rules Dedicated Dept.
View guide
Haryana
300+ operators
Central Act

Registrar of Chit Funds is the Economic and Statistical Adviser (ESA), Haryana. Rules available on esaharyana.gov.in.

Haryana Rules ESA Registrar
View guide
West Bengal
200+ operators
Central Act

Regulated by IGR West Bengal. Important: the Saradha/Rose Valley schemes were NOT registered chit funds — they were illegal unregistered Ponzi operations.

WB Rules Ponzi distinction
View guide

State legislative framework at a glance

StateOwn state Act?State rulesRegistrar authority
Tamil NaduCentral Act onlyTN Chit Funds Rules, 1984Dept of Cooperation
Andhra Pradesh AP Act, 1971AP Chit Funds Rules, 2008Revenue, Reg & Stamps Dept
Kerala Chitties Act, 1975Kerala Chit Funds Rules, 2012Inspector General of Registration
KarnatakaCentral Act onlyKarnataka Chit Funds RulesDept of Cooperation (Sahakara Sindhu)
Maharashtra MH Amendment, 2023MH-specific procedural rulesDept of GST (notification matters)
TelanganaCentral Act onlyState circulars; T-Chits platformRegistration & Stamps Dept
DelhiCentral Act onlyDelhi Chit Funds RulesDept. of Chit Fund, GNCT Delhi
HaryanaCentral Act onlyHaryana Chit Funds RulesRegistrar of Chit Funds (ESA)
West BengalCentral Act onlyWB Chit Funds RulesIGR West Bengal

Frequently asked questions

The Chit Funds Act, 1982 applies in all states as the central framework. However, Andhra Pradesh (1971), Kerala (1975), and Tamil Nadu have their own additional legislation. Maharashtra enacted a state-specific amendment in 2023. All states have their own Registrar of Chits and subordinate rules.
The maximum is 7% of the chit amount per instalment, as of 1 January 2020 (Chit Funds Amendment Act, 2019). The original 1982 Act set a 5% cap — that figure is now outdated. Any registered operator charging more than 7% is in violation of the law.
Yes, but it must obtain separate registration from the Registrar of Chits in each state where it operates. A registration in Tamil Nadu does not permit operations in Karnataka or Telangana. Large operators maintain individual state-wise registrations in every state they serve.
There is no single national regulator for chit funds. Regulation is entirely at the state level through State Registrars of Chits. The RBI has limited supervisory inspection powers under Section 45N of the RBI Act, 1934, but does not operationally regulate chit funds. SEBI and IRDAI have no jurisdiction.
Five key changes: (1) foreman commission raised from 5% to 7%; (2) video conferencing allowed for subscriber draw presence; (3) foreman given right of lien against defaulting subscribers; (4) individual chit limits raised from ₹1L to ₹3L, firm limits from ₹6L to ₹18L; (5) “Fraternity Fund” and “Rotating Savings and Credit Institution” added as permitted business names. All effective from 1 January 2020.
File a written complaint with your state’s Registrar of Chits. For criminal matters (fraud, misappropriation), file an FIR with the local police citing Section 76 of the Chit Funds Act, 1982 (imprisonment up to 2 years and/or fine). Consumer Forum complaints are available for civil remedies. Acting early is critical — the Registrar can freeze the operator’s security deposit.
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Last updated: June 2026. This content is for educational and informational purposes only. Regulations are subject to change. chit.fund is not a legal advisory firm. For specific legal or compliance advice, consult a practising Advocate familiar with the Chit Funds Act, 1982 and applicable state rules. chit.fund is an information portal — we do not operate, manage, or accept deposits for any chit fund.

* Operator count figures are approximate and sourced from publicly available state Registrar data. Counts change as operators register, deregister, or transfer. Verify current counts with your state Registrar of Chits.

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