Parliament passes bill to raise chit funds collection 3 times

Paving way for raising chit fund collections by three times and ensuring orderly growth of the sector, the Rajya Sabha on Thursday passed the Chit Funds (Amendment) Bill, 2019 by voice vote.

The bill has already been passed by the Lok Sabha.

Besides raising the monetary limit in collections, the Bill also provides for increasing commission for the person managing the fund to 7 per cent from 5 per cent.

As per the bill, the collection limit for individuals has been raised to Rs 3 lakh, up from the present Rs 1 lakh. For firms, the limit would be 18 lakhs from Rs 6 lakh now.

Introducing the bill in the Upper House, Minister of State for Finance Anurag Thakur said that the collection limit has been raised in view of inflation rate since 2001.

Chit funds are popular among low-income group people as it offers them the opportunity to save and invest. Alongside banks and other institutions, chit funds have played an important role in financial inclusion. It provides easy access to funds to low-income group and small businesses.

The Chit Fund Act, 1982 was enacted to provide for regulation of chit funds which have conventionally satisfied the financial needs of the low income households.

Replying to discussions over the bill, Anurag Thakur again stressed that chit funds are distinct from unregulated deposits and Ponzi schemes.IANS