Lok Sabha passes Chit Funds (Amendment) Bill, 2019

The Lok Sabha on Wednesday (November 20) passed the Chit Funds (Amendment) Bill, 2019. The Bill states that a "fraternity fund" will be considered a chit fund and makes several other changes to the principal Act.

Lok Sabha passes Chit Funds (Amendment) Bill, 2019

The Lok Sabha on Wednesday (November 20) passed the Chit Funds (Amendment) Bill, 2019. The Bill states that a "fraternity fund" will be considered a chit fund and makes several other changes to the principal Act.

The bill was tabled by Union Finance Minister Nirmala Sitharaman and MPs across party lines were briefed about the bill by the Joint Secretary, Finance, on November 15 (Friday).

The bill aims at putting in place a mechanism to ensure transparency in chit fund schemes and protect subscribers. The Centre decided to bring the bill in the wake of a number of chit fund scams in the recent past, leaving thousands of subscribers losing their hard-earned money.

With the amendments, the prescribed ceiling of aggregate chit fund amount for individuals would be raised to Rs 3 lakh from Rs 1 lakh, and Rs 18 lakh from Rs 6 lakh for firms. The words `gross chit amount`, `share of discount` and `net chit amount` would now be substituted with `chit amount`, `dividend` and `prize amount`, respectively, in the Act, reported IANS.

It is to be noted that majority of the chit fund scams have come from West Bengal and several Trinamool Congress (TMC) members are alleged to be involved in these scams. TMC MP Sougata Roy was also present in the meeting when the MPs was briefed by the Centre about the Chit Funds (Amendment) Bill, 2019.

Besides the Chit Funds (Amendment) Bill, 2019, the Winter Session of Parliament would also discussions on the Citizenship (amendment) Bill. On Sunday, Prime Minister Narendra Modi held an all-party meeting and said that the Centre was ready to discuss all issues. The prime minister appealed the opposition parties to make the Winter Session as productive as the previous one.