The government of Telangana, through its Registration & Stamps Department has collaborated with T-Hub startup ChitMonks to launch T-Chits, a blockchain-based chit fund administration
As the chit fund business in India got corporatized, regulations to administer the business and protect the interest of all subscribers involved also evolved. The Central act of Chit funds, which came into effect from 1982 has since been the guiding book for all the regulators across India. At the state level, governments are responsible to administer the chit fund business in the states.
According to a statement from ChitMonks, T-Chits is a revolutionary way of administering the registered Chit Fund businesses in the state. It brings the organizations in the state and the registrars onto an immutable, smart contract-enabled, highly-secure Blockchain system powered by ChitMonks.
The Registration & Stamps Department will run a three-month pilot with ChitMonks in its Hyderabad, Golkonda and Ranga Reddy offices.
Srinivasulu Vemula, Joint Inspector General of the Registration & Stamps Department says that he expects 10 chitfund companies to come on board for the first pilot. “This system reduces manual drudgery for chit fund companies. They need not spend time coming to my office, filing everything manually,” he adds.
By bringing the registered chit fund companies and all the registrars of the state onto this blockchain network, the ease of doing business and transparency to businesses will increase. “It will build immense trust among millions of subscribers who can always invest in these registered chit fund companies, which are registering Chit groups with the registrar on this blockchain system. It will help registrars administer the chit funds seamlessly with improved process flow and bring more awareness, protecting millions of subscribers from unregistered business and potential fraud,” says Pavan Aadipura, founder of ChitMonks.
This will also benefit the Chit Fund companies to ease their operations and have complete focus on servicing the business. By bringing such an effective implementation of regulation, it might open doors to many new players, Pavan adds.
Telangana houses biggest corporate houses in the business, playing significant role in south India. The state is home to about 640 Chit fund companies, doing business in about 1200 branches, which run around 9000 active Chit Groups amounting to approximately about Rs 40,000 crore of Assets Under Management (AUM) with about 8,000-10,000 crores float every year. Telangana itself accounts to about 20-25% of the Chit business in India.
Founded in February 2016, ChitMonks works with registered Chit Fund companies to make investing in Chit funds more accessible, credible and rewarding to all the stakeholders.