Rajya Sabha passed Chit Funds (Amendment) Bill, 2019

The Parliament has passed the Chit Funds (Amendment) Bill, 2019. It will streamline operations of collective investment schemes or chit funds, with the aim to protect investors that primarily comprises economically weaker sections of the society. Chit funds are legal and registered and are different from ponzi schemes as well as unregulated deposits.

Daily Current Affairs Quiz 2019

It highlights the crucial role chit funds play in India’s rural economy, providing people with access to funds and investment opportunities, especially in regions where banks and financial institutions do not have a presence. Currently, one lakh rupees for chits conducted by individuals, and for every individual in a firm or association with less than four partners, and Six lakh rupees for firms with four or more partners. The Bill increases these limits to three lakh rupees and 18 lakh rupees, respectively. This Act does not apply to any chit started before it was enacted, and any chit (or multiple chits being managed by the same foreman) where the amount is less than Rs 100. The Bill removes the limit of Rs 100, and allows the state governments to specify the base amount over which the provisions of the Act will apply.