The Lok Sabha on November 21, 2019 passed the Chit Funds (Amendment) Bill, 2019 by voice vote.
According to the Minister of State for Finance Anurag Thakur, the bill has been brought with an intention of protecting the interests of investors belonging to the poor and marginalized section of the society.
Features
- The bill seeks to amend the 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 rupees to three lakh rupees and in case of firms, the limit has been raised from 6 lakh to 18 lakh rupees.
- Besides, words 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.
