New Delhi: The Parliament passed Thursday a bill which provides for raising the monetary limits for chit funds to three fold and hiking commission for foreman.
The Chit Funds (Amendment) Bill, 2019 was passed by voice vote in Rajya Sabha. The bill got Lok Sabha’s nod, November 20.
The maximum chit amount is proposed to be raised from Rs 1,00,000 to Rs 3,00,000 for those managed by individuals or less than four partners, and from Rs 6,00,000 to Rs 18,00,000 for firms with four or more partners.
The maximum commission for foreman, who is responsible for managing the chit, is proposed to be raised from five per cent to seven per cent. The bill also allows the foreman a right to lien against the credit balance from subscribers.
The Chit Funds (Amendment) Bill, 2019 introduces words such as ‘fraternity fund’, ‘rotating savings’ and ‘credit institution’ to make chit funds more respectable, said Minister of State for Finance Anurag Thakur in his reply to the House on the bill.
Piloting the bill, Thakur said that chit funds are legal and one should understand that these are different from unregulated deposit schemes or ponzi schemes.
The bill provides for substituting terms like ‘chit amount’, ‘dividend’ and ‘prize amount’ with ‘gross chit amount’, ‘share of discount’ and ‘net chit fund’ respectively. It further proposes to allow subscribers to join the process of drawing chits through video-conferencing.
About members’ objection to this clause, Thakur told the House that all subscribers should be present at the time of draw of chit fund but if some people are busy or unable to attend those then they should have the option of video conference.
Responding to various issues raised by members during the debate, Thakur said chit fund subscribers can opt for insurance but the government cannot make it mandatory as it would add to the cost.
PTI
