Parliament passes Chit Funds (Amendment) Bill, 2019

Parliament

Parliament has passed the Chit Funds (Amendment) Bill, 2019 with the Rajya Sabha approving it today.

Earlier, the Lok Sabha had passed the bill seeking amendment in Chit Funds Act, 1982 which regulates chit funds and prohibits a fund from being created without the prior sanction of a State Government.

The amendments have been made to facilitate the orderly growth of the chit fund sector to remove bottlenecks and enable greater financial access to people.

Under the legislation, the prescribed ceiling of aggregate chit fund amount for individuals has been raised from one lakh to three lakh rupees and in case of firms, the limit has been raised from six lakh to 18 lakh rupees.

Besides, words like chit amount, dividend and prize amount have been substituted with terms gross chit amount, the share of discount and net chit amount.

The legislation also increases the maximum commission of a foreman from five per cent to seven per cent and also allows the foreman a right to lien against the credit balance from subscribers.

Replying to the discussion over the bill, Minister of State for Finance, Anurag Thakur said, it has been made transparent to protect the interest of the poor. He said, the government has taken care of the interest of the small investors in the legislation.

Mr. Thakur said the Center is running a campaign and financial literacy programmes to make people aware about investments.

The Minister said the NDA government has worked for financial inclusion in the country.

Earlier participating in the discussion, GVL Narsimha Rao of BJP highlighted government initiatives like Jan Dhan Yojna for the poor. Manoj Jha of RJD and Kumar Ketkar of Congress, Shiv Pratap Shukla of BJP and others also participated in the discussion.   

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