Chit Funds (Amendment) Bill-2018, Features, Changes details

Union Cabinet Approves Chit Funds (Amendment) Bill-2018, Details, Features, Changes

Union Cabinet, chaired by Prime Minister Narendra Modi, on 20th February 2018, has approved to introduce the Chit Funds (Amendment) Bill-2018 in Parliament, New Delhi.

Chit Funds (Amendment) Bill-2018 would be an initiative to protect the savings of the investors.

Chit Funds (Amendment) Bill-2018 will focus to facilitate the orderly growth of the Chit Funds sector and to provide more financial products to the investors.

Chit Funds (Amendment) Bill-2018 is aimed to eliminate the bottlenecks being faced by the Chit Funds industry, thereby enabling greater financial access of people to other financial products,

The Following Amendments to the Chit Funds Act-1982 have been proposed:

Use of the words "Fraternity Fund" for chit business under Sections 2(b) and 11(1) of the Chit Funds Act- 1982, to symbolise its innate nature, and distinguish its working from "Prize Chits" which are banned under a separate legislation.

Increasing the ceiling of foreman's commission from a maximum of 5% to 7%, as the rate has remained static since the commencement of the Act while overheads and other costs have increased manifold.

Allowing the foreman a right to lien for the dues from subscribers, so that set-off is allowed by the Chit company for subscribers who have already drawn funds, so as to discourage default by them.

Amending Section 85 (b) of the Chit Funds Act- 1982 to remove the ceiling of one hundred rupees set in 1982 at the time of framing the Chit Funds Act, which has lost its relevance. State governments would be allowed to commend the ceiling and to increase it from time to time.