Chit funds and finance corporations: incorporating the gist of proceedings of a seminar on October 4 and 5, 1974

The prolific growth of chit funds, particularly in the context of rapid expansion of banking and credit facilities, is a matter for concern. The book throws a great deal of light on the working of prize and auction chits and the abuses and malpractices prevalent in them. It underlines the need for stringent regulation and effec tive enforcement to make chit funds function efficiently. Chit funds are not a relatively cheap. source of credit or an attractive medium of saving, as is generally believed. People who join them are not fully aware of the risks and costs associated with the operations of this peculiar indi genous financial institution.

The Bangalore type of finance Corporations pose a real threat to the safety of funds of their deposi tors. Their activities need to be effectively controlled before the country is overtaken by a wave of South Sea bubbles".
In the years to come, com mercial banks have to expand even faster than they have done in recent years and meet to a much arger extent than at present. the credit needs, for investment and consumption, of the large number of persons of small means.