Infinity Consultants, a corporate finance advisory firm, has launched Zayd Chit Funds, a Sharia-compliant chit fund.
“The chit fund is expected to be operational shortly in Bangalore and is compatible with the Chit Funds Act of 1982,” Saif Ahmed, managing partner, Infinity Consultants, told Business Line.
“The speciality of our fund schemes is that they allow one to utilise hard-earned money in a halal way, which is not the case with other chit funds,” he added.
The chit fund is authorised to operate as a registered company by the Karnataka Government and is permitted by the ulemas.
Explaining the features of Sharia-compliant chit fund, Ahmed said members would get full chit value from the first draw itself. To receive the chit value, members have to wait till their names are drawn from the lots every month.”
“The normal practice of ‘bidding’ during the auction is not Islamic and thus will not be followed in our scheme. This is the main difference between the traditional chit fund and us,” he said.
The company will initially launch six chit groups ranging from monthly subscription of Rs 5,000 to Rs 15,000. Later, based on the feedback, it will be scaled up and also a few more chit groups added.
After one’s name is drawn from the lots, the member will have to submit the necessary documents and securities before receiving the chit value. A service charge of five per cent, that has been authorised by the government, will be levied, Ahmed said.
The company will initially open one office in south Bangalore and later spread its operations to other parts of the city, he added.