There are no provisions in the Companies Act, 1956 or 2013 relating to Chit Funds or ‘Chit Fund companies’. Provisions to this effect are contained in the Chit Funds Act, 1982 which is a Central Act administered by the Ministry of Finance (Department of Financial Services) but its implementation vests in the State Governments concerned who register entities running Chit Funds and regulate their affairs and proceed against violators including companies running Chit Funds without such registrations.  The Central Government has however, inter- alia, investigated affairs of 185 companies falling into the category of so called Chit Funds/MLM/Ponzi activities for violation of the Companies Act through Serious Fraud Investigation Office (SFIO) during the last three years and current year. 

 A list containing State-wise and year-wise details of chit fund/MLM companies ordered for investigation during the last three years and current year (upto 31.10.2016).

2013-14

S. No.	State	No. of Companies ordered for Investigation	Completed Investigations
1	West Bengal	57	57
2	Assam	01	01
3	Uttar Pradesh	05	05
	Total	63	63

 2014-15

S. No.	State	No. of Companies ordered for Investigation	Completed Investigations
1	West Bengal	29	29
2	Jharkhand	02	02
3	Bihar	02	02
4	Orissa	18	-
	Total	51	33

 2015-16

S. No.	State	No. of Companies ordered for Investigation	Completed Investigations
1	West Bengal	26	10
2	Orissa	08	-
3	Maharashtra	05	-
4	Punjab	01	-
5	Rajasthan	01	-
6	Assam	06	-
	Total	47	10

 2016-17

S. No.	State	No. of Companies ordered for Investigation	Completed Investigations
1	Maharashtra	01	-
2	West Bengal	19	01
3	Orissa	01	-
4	Assam	03	-
	Total	24	01

This was stated by Shri Arjun Ram Meghwal, Minister of State in the Ministry of Corporate Affairs in written reply to a question in Lok Sabha today.

Chit fund regulation: central statute with state implementation; SFIO probed companies for alleged chit/MLM/Ponzi company-law violations. Chit funds are governed by the Chit Funds Act with state-level registration and enforcement; the Serious Fraud Investigation Office undertook investigations into companies alleged to operate as chit funds/MLM/Ponzi schemes for possible Companies Act violations over the past three years and the current year up to 31 October 2016, with a state-wise, year-wise record of companies ordered for investigation and counts of completed investigations provided to Parliament.