Bill to amend chit funds Act introduced in Lok Sabha to facilitate orderly growth of sector

The government on Monday introduced a Bill in the Lok Sabha to amend the Chit Funds Act, 1982, to facilitate orderly growth of the sector and provide more financial products to investors. The Chit Funds (Amendment) Bill, 2018, was introduced by the Minister of State for Finance Shiv Pratap Shukla amid din. The Bill aims to remove bottlenecks being faced by the industry.

The chit business will be required to use the term 'fraternity fund' to signify its nature as well as to differentiate its working from 'prize chits' that are banned under a separate legislation.

The Bill proposes to allow the two minimum required subscribers to join through video conferencing duly recorded by the foreman, as physical presence of the subscribers towards the final stages of a Chit may not be forthcoming easily.

It also hikes the ceiling of the foreman's commission from a maximum of five per cent to seven per cent.

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Updated Date: Mar 12, 2018 15:58:15 IST