Bill on chit funds sec­tor in­tro­duced

DNA (Daily News & Analysis) Mumbai Edition - - FRONT PAGE -

A Bill to stream­line and strengthen the chit fund sec­tor was in­tro­duced in the Lok Sabha on Mon­day, which man­dates video con­fer­enc­ing while the open­ing of bids and seeks to hike com­mis­sion of fore­men from 5 per cent to 7 per cent.

The Chit Funds (Amend­ment) Bill, 2018, is based on the rec­om­men­da­tions of the Par­lia­men­tary Stand­ing Com­mit­tee on Fi­nance and the Ad­vi­sory Groups on Chit Funds set up by the cen­tral govern­ment.

The Amend­ment Bill pro­vides for al­low­ing the manda­tory pres­ence of two sub­scribers, as re­quired ei­ther in per­son or through video con­fer­enc­ing duly recorded by the fore­man, while the bids are be­ing opened.

It also pro­vides for in­creas­ing of ceil­ing of fore­man’s com­mis­sion from five per cent to seven per cent.

Ac­cord­ing to the Bill, con­cerns have been ex­pressed by var­i­ous stake­hold­ers re­gard­ing chal­lenges be­ing faced by the chit busi­ness.

The cen­tral govern­ment had con­sti­tuted a key Ad­vi­sory Group on chit funds to re­view the le­gal, reg­u­la­tory and in­sti­tu­tional frame­work for the sec­tor and its ef­fi­cacy and to sug­gest ini­tia­tives re­quired for its or­derly growth.

The Chit Funds Act, 1982 was en­acted to pro­vide for the reg­u­la­tion of chit funds which are in­dige­nous busi­ness in In­dia and have con­ven­tion­ally sat­is­fied the fi­nan­cial needs of low in­come house­holds.

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