Chit Funds (Amendment) Bill, 2019

The Parliament has passed the Chit Funds (Amendment) Bill, 2019 as the upper house of the parliament, Rajya Sabha on Thursday, 28 November 2019 passed the bill.

Earlier this month, at the lower house of the parliament, Lok Sabha, Minister of State for Finance and Corporate Affairs, Anurag Singh Thakur introduce the bill to amend the

Chit Funds Act of 1982, which was by the Lok Sabha on 20 November 2019. Chit funds in India are regulated under the Chit Funds Act of 1982 to ensure timely return of money.

Amendments made by the bill are:

Chit Funds to be recognized under various names, including chit, Kuri, also additionally included names fraternity fund and rotating savings and credit institution.

Terms chit amount, prize amount and dividend were substituted with gross chit amount, net chit amount and share of discount respectively.

When a chit is drawn, at least two subscribers must be present by either physically or through a video calling facility.

Foreman’s commission increased to 7 percent from 5 percent.

Increased Maximum amount of chit funds that can be collected by individuals to Rs 3 lakh from 1 lakh and for Firms Rs 18 lakh from Rs 6 lakh.