Speaker Sumitra Mahajan refers chit fund bill to Standing Committee on Finance

New Delhi: Lok Sabha speaker Sumitra Mahajan has referred a bill seeking to streamline and strengthen the chit fund sector to the Standing Committee on Finance for examination and asked it to submit the report within three months.

The Centre had constituted an 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 Fund (Amendment) Bill seeks to amend the Chit Funds Act, 1982.

“…The Speaker, Lok Sabha has referred the Chit Funds (Amendment) Bill, as introduced in Lok Sabha, to the standing committee on finance for examination and report within three months,” according to a bulletin issued by the Lok Sabha secretariat.

The 31-member Parliament’s Standing Committee on Finance is headed by Congress MP M. Veerappa Moily and former prime minister Manmohan Singh is also its member. The bill aims at prohibiting a fund from being created without the prior sanction of the state government.

Under a chit fund, people agree to pay a certain amount from time to time. Periodically, one of the subscribers is chosen by drawing a chit to receive the prize amount from the fund.

The amendment bill mandates video-conferencing while the opening of bids and seeks to hike commission of foremen, who act on behalf of the chit fund management company to collect the money, from five per cent to seven per cent.

It also 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.livemint