Journal Publication

1. 1 Impact of Organizational Culture on Brand Value. An analytical Case
study of Companies functioning in Dubai
2 Emerging Trends in Corporate Capital Structure Patterns - A Study of
selected Manufacturing Industries
3 Motivational Factors and Entrepreneurship: A Study With Reference To
Self Help Groups in Varanasi
4 Accounting Information and Stock Price Reaction of Listed Companies
— Empirical Evidence from all Listed Companies from NSE in Private
sector banks
5 Investors Attitude towards Mutual Funds Investments: A Study of Delhi-
NCR Region
6 An Empirical Study on Managers with Relation to Emotional Intelligence
and Job Burnout: Impact of Demographic Variables
7 Assessing Organizational Citizenship Behavior and its Relationship with
Employees Engagement in Indian Organizations
8 Value stream mapping: A tool for Indian Agri-food supply chain
9 Achieving Millennium Development Goal of Inclusive Growth through
Financial Inclusion
10 Work Life Balance: A Key Driver of Employee Engagement
11 Impact of TQS on Financial Performance of the Business through Service
Profit Chain
12 Anatomy of a financial collapse: Ethical, Managerial, and Governance
Issues
13 A Study on Spouse Sobriety Influence on Alcoholic Anonymous Group
Members
14 Women Empowerment: In Present Scenario
15 Employable Skills of Today’s Youth: The Present Demand of the Recruiters
16 The Virtual Youth and The Changing Sociological Perspectives
17 Gender Discrimination at Work-Place : A Bane To Women Empowerment
In India
18 Impact Of E-Learning In LIS Profession
19 A Case Study of Chit Fund Scam In India
20 Women Online Shopping: A critical review of literature
21 Employment and production of handicrafts in Jammu and Kashmir: An
economic analysis
22 A Study of Attitude of different Faculty Research Scholars towards
Research
23 World of Fantasy in Arun Joshi’s The City and River
24 Process Development of Hemp Dyeing with Natural Dye Extracted from
“Rehum emodi Roots” (Dolu) with special reference “Uttarakhand”
25 A Study on the Impact of Product Review upon Consumer’s Perception
towards E-Commerce Adoption
Pradeep Kumar Pillai, Sunita Dwivedi
Dr. Sukhdev Singh, Rajni Sofat
Sofia Khan
Udayan Kachchhy, Dr. Bhavik U Swadia
Dr. Bharti Wadhwa, Dr. Anubha Vashisht, Ms. Davinder Kaur.
Manish Dayal, Dr. Shalini Srivastava.
Dr. Meera Shanker
Anil Kumar, Dr. G.S. Kushwaha
Shivangi Bhatia, Dr. Seema Singh.
Dr. Priya Sharma
Dr. Jyoti Sharma
Bernard Arogyaswamy
Dr. P. Jenis Mary
Manjeet Kumari, Upasana Chhabra
Dr. K. Anant Acharya, Dr. Vibha Jain, Manish Puntambekar
Smriti Tripathi
Dr. Aarti Sinha
Dr. Vandana Sengar, Kanchan Kishor Shegokar
Dr.Saikat Gochhait, Dr.P.C Tripathy
Rohit Singh
Towseef Mohi Ud Din
Mohammad Saquib Taufique
Veena.P
Vibha Kapoor
Dr. Pratyush Tripathi
IJRSMS
ISSN NO.: 2320-8236 Vol: 3, Issue: 1 Jan.-March, 2015

2. CONTENT
IRC’S INTERNATIONAL JOURNAL OF MULTIDISCIPLINARY RESEARCH IN SOCIAL
& MANAGEMENT SCIENCES
VOL.3 ISSUE 1 ISSN: 2320-8236 JANUARY-MARCH 2015
S.No. TITLE OF PAPER & AUTHORS PAGE No.
1 Impact of Organizational Culture on Brand Value. An analytical Case study of Companies functioning in Dubai
Pradeep Kumar Pillai, Sunita Dwivedi
1-8
2 Emerging Trends in Corporate Capital Structure Patterns - A Study of selected Manufacturing Industries
Dr. Sukhdev Singh, Rajni Sofat
9-19
3 Motivational Factors and Entrepreneurship: A Study With Reference To Self Help Groups in Varanasi
Sofia Khan
20- 28
4 Accounting Information and Stock Price Reaction of Listed Companies — Empirical Evidence from all Listed Companies from
NSE in Private sector banks
Udayan Kachchhy, Dr. Bhavik U Swadia
29-34
5 Investors Attitude towards Mutual Funds Investments: A Study of Delhi-NCR Region
Dr. Bharti Wadhwa, Dr. Anubha Vashisht, Ms. Davinder Kaur.
29-32
6 An Empirical Study on Managers with Relation to Emotional Intelligence and Job Burnout: Impact of Demographic Variables
Manish Dayal, Dr. Shalini Srivastava.
33-39
7 Assessing Organizational Citizenship Behavior and its Relationship with Employees Engagement in Indian Organizations
Dr. Meera Shanker
39-44
8 Value stream mapping: A tool for Indian Agri-food supply chain
Anil Kumar, Dr. G.S. Kushwaha
45-54
9 Achieving Millennium Development Goal of Inclusive Growth through Financial Inclusion
Shivangi Bhatia, Dr. Seema Singh.
55- 58
10 Work Life Balance: A Key Driver of Employee Engagement
Dr. Priya Sharma
59- 64
11 Impact of TQS on Financial Performance of the Business through Service Profit Chain
Dr. Jyoti Sharma
65- 79
12 Anatomy of a financial collapse: Ethical, Managerial, and Governance Issues
Bernard Arogyaswamy
80- 89
13 A Study on Spouse Sobriety Influence on Alcoholic Anonymous Group Members
Dr. P. Jenis Mary
90-95
14 Women Empowerment: In Present Scenario
Manjeet Kumari, Upasana Chhabra
96- 98
15 Employable Skills of Today’s Youth: The Present Demand of the Recruiters
Dr. K. Anant Acharya, Dr. Vibha Jain, Manish Puntambekar
99- 102
16 The Virtual Youth and The Changing Sociological Perspectives
Smriti Tripathi
103- 107
17 Gender Discrimination at Work-Place : A Bane To Women Empowerment In India
Dr. Aarti Sinha
108-110
18 Impact Of E-Learning In LIS Profession
Dr. Vandana Sengar, Kanchan Kishor Shegokar
111- 112
19 Women Online Shopping: A critical review of literature
Rohit Singh
113-116
20 Employment and production of handicrafts in Jammu and Kashmir: An economic analysis
Towseef Mohi Ud Din
117- 120
21 A Study of Attitude of different Faculty Research Scholars towards Research
Mohammad Saquib Taufique
121- 124
22 World of Fantasy in Arun Joshi’s The City and River
Veena.P
125-126
23 Process Development of Hemp Dyeing with Natural Dye Extracted from “Rehum emodi Roots” (Dolu) with special reference
“Uttarakhand”
Vibha Kapoor
127-128
24 A Study on the Impact of Product Review upon Consumer’s Perception towards E-Commerce Adoption
Dr. Pratyush Tripathi.
129- 134
25 A Case Study of Chit Fund Scam In India
Dr.Saikat Gochhait, Dr.P.C Tripathy
135-140

3. ISSN: 2320-8236
VOLUME:3 , ISSUE:1
JANUARY-MARCH 2015 www.ircjournals.orgwww.ircjournals.org
133
A Case Study of Chit Fund Scam In India
Dr.Saikat Gochhait
Faculty,
Khalokote Auto College,
Berhampur, Odisha
Dr.P.C Tripathy
Reader,
Department of Business Administration,
Sambalpur University, Odisha, India
Abstract:
Non-banking financial companies are at all time high now days. Many such companies have started offering lucrative schemes by
promising high interest rates and borrowing schemes to their investors. These schemes, generally termed as Chit Funds Schemes
today have become the easiest choice of saving and borrowing technique. Investors are becoming the victims and taking high risks in
name of such chit funds. People are not able to identify the difference between a registered chit fund company which are legal and
safe and the unregistered unorganized chit fund companies. This case study makes an attempt to depicts the working principle of a
recognized chit fund company/scheme, difference between registered and unregistered chit Fund Company thereby enhancing the
awareness among people before making their choice and decision of choosing a chit fund scheme. This paper is based on the
secondary data collected from government websites, interviews given by government officials and other published records.
Introduction
The Indian chit fund industry generates an estimated 3.39 per cent of household savings (or Rs 5.88 crore), compared to 4.92 per cent
invested in shares and debentures. Over 95 per cent of chit fund companies are small and medium enterprises (SMEs) and they are
important sources of finance for SMEs operating in other sectors. Large companies have managed to attract investors. The $1.3 billion
(Rs 6,110 crore) Chennai-based Shriram Group, for example, which runs the largest chit fund business in the country, manages a
corpus of Rs 3,200 crore annually.
Chit Fund Working Model
In India, if the value of the chit run by a chit fund operator exceeds Rs. 10 and is not registered, it is considered to be an illegal chit
fund. Every institutionalized and registered chit fund is safe and sound and offer greatest support o its customers. Before
understanding the working model of chit fund, let us know few terminologies which are specifically used in the working of such
schemes
1. Chit Agreement - a legal contract with al detail of rules and regulations signed by foreman and investors
2. Chit Group – group of investors who are the part of registered chit fund group
3. Chit amount – the amount paid by the investors on specific period
4. Foreman – person/company who maintains records, responsible for collection of money and heads the auctions
5. Foreman’s Commission - 5% of the gross chit fund amount paid to the foreman
6. Prize money – Summation of al periodic collections minus maximum biding amount(maximum biding amount is inclusive of
foreman’s commission)
For a particular chit fund scheme there is a chit group which has fixed number of investors. These investors have to contribute a fixed
amount of money, presume Rs. 5,00 for at specific intervals for a period of time. The interval of paying the money is usually a month
for the investors. The total duration of the scheme is equivalent to the number of members of the chit group. Suppose the group is of
10 members, then they have to pay for 10 months. The money thus collected from the members every month goes into a common
fund. The money is then given to one member who is usually selected through a lucky draw. Auction is another process to give away
the money to one member based on the bid. Foreman is responsible for the collection of the installments and heading this auction.
Every member is allowed to bid every month in the auction for the chit fund money collected that very month. The member offering
the lowest bid is awarded the bid. The bid is on the maximum percentage of discount the bidder is ready to offer on the collected
money. The discount can go up to maximum of 40%. In other words, the bidder who is ready to take the lowest sum of money wins
the bid. The person wining the bid is called the ‘prized member’ who receives the ‘prize money’. The wining bidder receives the
amount after deduction of the percentage of discount s/he has offered and also the percentage of commission to be paid to the
foreman. The amount accrued by way of discount excluding foreman’s commission is then distributed among other members of the
chit fund group as dividend. The prized member is not allowed to bid any more in the remaining months of the scheme.
Chit Fund Scams in India
Recent years have seen a high rise in the number of fraudulent chit fund operations. They are making their way into the poor & middle
class people by luring them with offers of high interest rates and returns. People are falling prey to such companies and their schemes
despite of the number of detected fake companies and schemes. For some victims, such risks are extended to physical threats or risks,
los of their jewelry and homes, depression, and even suicide beyond their loss of personal savings or funds. Such frauds also have a
considerable impact on economies and markets by dejecting consumer trust and confidence in legitimate businesses. Such companies
are witty and quick to alter their modus operandi to reduce the risks of law enforcement detection and investigation and to respond to

4. A Case Study of Chit Fund Scam In India
Dr. SAIKAT GOCHHAIT, Dr. P.C. TRIPATHY
© INTERNATIONAL RESEARCH COMMUNION
ISSN: 2320-8236
VOLUME: 3, ISSUE:1
JANUARY-MARCH 2015 www.ircjournals.orgwww.ircjournals.org
134
consumer and business awareness of their current methods. People need to be more aware and think before investing in such dubious
companies. The biggest chit fund scam ever heard in India is the Saradha Group Chit Fund Scam. This recent scam is considered to
create a world record by slapping nearly 60 cases against Mr. Sudipta Sen, chairman of Saradha Group. Over 10 million people have
been duped by the investment schemes of Saradha Group which was a consortium of over 200 private companies.
One more Rs. 10 Cr chit fund scam case has been busted by Patiala Police. The company claimed to double the money of its investors in
one-and-a-half year. In this way they were able to lure and trap more than 10 thousand people to invest their money. The company
showed the depositors that their money was invested on the ongoing projects of real estate sector, forestry and paper mills. Another
company which encouraged only women to invest in the schemes and join the chit fund group was The Redamma Dasara Chit Fund
Company promising them high returns. It is alleged that housewives and small-time workers had put their hard-earned money in the
company and the deposits had exceeded Rs.3 crore.
Case Study: SARADHA GROUP (SG) FINANCIAL SCANDAL
Saradha Group of financial services was incorporated in the year 2006. The service this group offered was called as PONZI SCHEME
which is very much like a chit fund. However, those who invest in this company would avail high rate of return, this is what the group
had published for investors to be attracted in order to invest in this group. The workings of the PONZI SCHEME is investment of capital
which leads to return on the investment and further additional investment by new investors increases the rate of return as to increase the
funds raised. The initial appraisal of
capital required by the SG was by issuing Secured Debentures to investors and so this was their first method of raising funds as you read
on you will be astonished as to find the different ways a company can raise funds though it is not legal, this is what the scandal is about.
The company grew in strength and the numbers increased to 50 and any such group or company falls under the jurisdiction of SEBI
(Securities Exchange Board of India) and the rules and regulations would apply to this SG company i.e. to prepare a prospectus defining
the objective, shares, assets, to submit reports, profit and loss as well as balance sheet statements and so on, which the SG was not ready
to do and so this group ignored SEBI litigations and widened its location to all corners of Indian territory and the number of SG was
about 300 SME‟s (Small & Medium Scale Ent.) In the year 2010, they were categorized as Tourism Agency, Real Estate Agency,
Motorcycle Manufacturing Company, Water Supply Agency, Recruitment Agency and so on.
SEBI warned Saradha group in 2009 and persisted its investigation through 2010 after which Saradha group started running various
collective investment schemes, the very nature of the investment were kept away from the investors and instead were fraudulently sold
as chit funds. SEBI, no longer needing to remain a spectator, intervened and through the State Government of West Bengal initiated a
warning to close down or do the needful.
For the second time SG ignored the given warning and transformed their group into a small agency dealing in buying and selling of
SME‟s shares to other likely SME‟s or public. Apart from adapting to this method of raising funds, the SG wanted to be liberated from
all bindings of the government and SEBI and after only 3 months in this undertaking, realized that SEBI has a clear authorization in
shares being traded.
The acquired capitals were highly invested in Bengali Film Industry and members of the parliament and a member of the legislative
assembly was appointed as the brand ambassador of SG. Further SG in order to socialize their network and to increase their goodwill,
they opted for the best option there is „a deed of kindness‟, the group undertook campaigning and other financial necessaries for the
Kolkata Football Association and contributed motorcycles to Kolkata Police Force so as to sustain their bonds in the eye of the public.
An estimate 1500 journalists and 8 newspapers of different languages were undertaken by the group in the year 2013, in other words SG
managed to entice the media, the most unstable catalyst in the economy. However, justice cannot stay still or play blind for too long. All
workings against the law must be revealed and the committers penalized. TMC forcefully purchased the journalists and newspapers for
price much lower than the market value through blackmail which brought disclosure to all the unlawful conversions made by the group
and this information was leaked where in SEBI litigated the SG to liquidate all their assets and dissolve their undertakings to remit the
due to the investors. This is to prove that SEBI holds all grounds and there is a moral we all tend to forget these days in the name of
greed and success “truth exposes itself sooner or later”.
Research Questions:
Why do you think chit funds or ponzi schemes still persist in spite of many scams?
There are two obvious reasons why such Ponzi schemes persist. One is regulatory overlap and confusion. Regulators work in silos,
making it possible for fraudsters to come up with ingenious schemes to bypass individual regulators - also called "regulatory shopping".
The court notes that while Sebi has claimed that chit funds are not within its jurisdiction, it has also passed two orders directing the
winding up of such schemes and refund of deposits. So there is now an urgent need for the highest authorities in the country to put in
place a system that quickly spots any scheme seeking to raise money from large numbers of people by promising exceptional returns,
and treats it as prima facie suspect and fit for quick investigation and regulatory action.
How the Indian society has behaved and changed in response to inefficient governance and
corruption in public life during the post economic reforms years.
The analysis of the causes of change in society by applying methods borrowed from physical sciences has been around for a long time.
This effort has moved from the catastrophe theory of the 1970s (simplistically a theory of tipping points of large systems into

5. A Case Study of Chit Fund Scam In India
Dr. SAIKAT GOCHHAIT, Dr. P.C. TRIPATHY
© INTERNATIONAL RESEARCH COMMUNION
ISSN: 2320-8236
VOLUME: 3, ISSUE:1
JANUARY-MARCH 2015 www.ircjournals.orgwww.ircjournals.org
135
disequilibrium or disarray), chaos theory of the 1980s (that sought to emphasize the link between seemingly unrelated variables in
determining unanticipated “shocks” to large systems like weather) to the currently in fashion “complexity” theory (ideal for India) that
seeks to understand how order and stability in society arise from the interactions of many agents by applying a few simple hypotheses.
This can be applied to fundamental questions with which social scientists try to grapple: how do people in a free society make decisions,
cast votes, make alliances and companies? What is the basis of network of social and business contacts? What drives politics of conflict
and co-operation and enjoyment?
However, to expect physical science to provide a comprehensive theory of the functioning of society or provide pat answers to complex
social and political problems would be a trifle absurd. Nevertheless, once we recognise its limitations, properly applied physical science
can provide valuable insight in areas such as social, economic and civil planning, leading to better decision-making and a better
understanding of the electorate by the politicians. It could also bring rationality in people’s expectations from society and its governance
or control.
What should investors do to prevent chit fund scam?
 Check for the credibility and creditworthiness of the company and its promoters.
 Warn people about fraudulent companies & Report them to concerned authorities.
 Opt for state-run chit companies and go with firms with a long record and financially sound promoters.
 Understand the difference between Organised chit fund schemes which are required to register with the Registrar or Firms, Societies
and Chits and money circulation schemes.
 Invest in a scheme with no incentives for subscribers to bring in more people to the scheme.
 Implementation of easy-to-use web-based Chit Fund Management system (CFMS).
References:
1. Besley, Timothy, Stephen Coate and Glenn Loury. 1993. "The Economics of Rotating Savings and Credit Associations", The American
Economic Review, Vol. 83, No.4.
2. Bouman, F. J. A. 1995. "Rotating and Accumulating Savings and Credit Associations: A Development Perspective", World
Development, Vol.23, No.3.
3. Calomiris, Charles W. and Indira Rajaraman. 1998. "The Role of ROSCAs: Lumpy Durables or Event Insurance?" Journal of
Development Economics, Vol.56.
4. The Hindu Business Line (Archives)
5. Klonner, Stefan. 2002. "Understanding Chit Funds: Prize Determination and the Role of Auction Formats in Rotating Savings and
Credit Associations", Yale university mimeo.
6. Srinivas, Alam and Rajeev Dubey. 1999. "The Nidhi Nightmare", Business Today.

6. A Case Study of Chit Fund Scam In India
Dr. SAIKAT GOCHHAIT, Dr. P.C. TRIPATHY
© INTERNATIONAL RESEARCH COMMUNION
ISSN: 2320-8236
VOLUME: 3, ISSUE:1
JANUARY-MARCH 2015 www.ircjournals.orgwww.ircjournals.org
136
The Teaching note
1. Case synopsis
Non-banking financial companies are at all time high now days. Many such companies have started offering lucrative schemes by
promising high interest rates and borrowing schemes to their investors. These schemes, generally termed as Chit Funds Schemes today
have become the easiest choice of saving and borrowing technique. Investors are becoming the victims and taking high risks in name of
such chit funds. People are not able to identify the difference between a registered chit fund company which are legal and safe and the
unregistered unorganized chit fund companies. This case study makes an attempt to depicts the working principle of a recognized chit
fund company/scheme, difference between registered and unregistered chit Fund Company thereby enhancing the awareness among
people before making their choice and decision of choosing a chit fund scheme. This paper is based on the secondary data collected
from government websites, interviews given by government officials and other published records.
2. Courses and levels for which the case is intended
The case study is for Post Graduates management students from B School.
3. Teaching objectives
1. Why do you think chit funds or ponzi schemes still persist in spite of many scams?
2. How the Indian society has behaved and changed in response to inefficient governance and corruption in public life during the
post economic reforms years.
3. What should investors do to prevent chit fund scam?
4. Discussion questions and answers to those questions.
Why do you think chit funds or ponzi schemes still persist in spite of many scams?
There are two obvious reasons why such Ponzi schemes persist. One is regulatory overlap and confusion. Regulators work in silos,
making it possible for fraudsters to come up with ingenious schemes to bypass individual regulators - also called "regulatory shopping".
The court notes that while Sebi has claimed that chit funds are not within its jurisdiction, it has also passed two orders directing the
winding up of such schemes and refund of deposits. So there is now an urgent need for the highest authorities in the country to put in
place a system that quickly spots any scheme seeking to raise money from large numbers of people by promising exceptional returns,
and treats it as prima facie suspect and fit for quick investigation and regulatory action.
How the Indian society has behaved and changed in response to inefficient governance and corruption in public life during the
post economic reforms years.
The analysis of the causes of change in society by applying methods borrowed from physical sciences has been around for a long time.
This effort has moved from the catastrophe theory of the 1970s (simplistically a theory of tipping points of large systems into
disequilibrium or disarray), chaos theory of the 1980s (that sought to emphasize the link between seemingly unrelated variables in
determining unanticipated “shocks” to large systems like weather) to the currently in fashion “complexity” theory (ideal for India) that
seeks to understand how order and stability in society arise from the interactions of many agents by applying a few simple hypotheses.
This can be applied to fundamental questions with which social scientists try to grapple: how do people in a free society make decisions,
cast votes, make alliances and companies? What is the basis of network of social and business contacts? What drives politics of conflict
and co-operation and enjoyment?
However, to expect physical science to provide a comprehensive theory of the functioning of society or provide pat answers to complex
social and political problems would be a trifle absurd. Nevertheless, once we recognise its limitations, properly applied physical science
can provide valuable insight in areas such as social, economic and civil planning, leading to better decision-making and a better
understanding of the electorate by the politicians. It could also bring rationality in people’s expectations from society and its governance
or control.
What should investors do to prevent chit fund scam?
 Check for the credibility and creditworthiness of the company and its promoters.
 Warn people about fraudulent companies & Report them to concerned authorities.
 Opt for state-run chit companies and go with firms with a long record and financially sound promoters.
 Understand the difference between Organised chit fund schemes which are required to register with the Registrar or Firms, Societies
and Chits and money circulation schemes.
 Invest in a scheme with no incentives for subscribers to bring in more people to the scheme.
 Implementation of easy-to-use web-based Chit Fund Management system (CFMS).

7. A Case Study of Chit Fund Scam In India
Dr. SAIKAT GOCHHAIT, Dr. P.C. TRIPATHY
© INTERNATIONAL RESEARCH COMMUNION
ISSN: 2320-8236
VOLUME: 3, ISSUE:1
JANUARY-MARCH 2015 www.ircjournals.orgwww.ircjournals.org
137
5. Teaching Plan:
The time period to be allocated within class for 75-80 minutes. Typical components of a teaching plan are the following:
• Class introduction: Key points to make in the class introduction.(10-12 min)
• Major topics: a listing of topics, a suggested order in which to introduce them, key questions within each topic area, and identification
of items that are important to get on the board.(40-45 min)
• Wrap-up points (10-15 min)
• Supplemental teaching components: Some cases come with supplemental material such as video clips, audio, or in-class exercises.
(10-15 min)