Cabinet okays bill to ease compliance for chit funds, protect subscribers

The Cabinet on Wednesday approved a bill that seeks to reduce the compliance burden of the registered chit funds industry and protect the interest of subscribers, Union minister Prakash Javadekar here.

The Cabinet gave approval for the introduction of Chit Funds (Amendment) Bill, 2019, in Parliament, the Information and Broadcasting Minister told reporters after the meeting.

He said the bill is aimed at fulfilling the objectives of reducing the regulatory or compliance burden of the registered chit funds industry as well as protecting the interest of subscribers.

The government had earlier in 2018 introduced a bill to regulate the chit fund industry but it lapsed, the minister said.

The bill was introduced in the Lok Sabha in March 2018 and later referred to a standing committee on finance for scrutiny.

The parliamentary panel had suggested the government to incorporate element of insurance coverage for subscribers, among others.

It also noted that mobilising short-term funds to meet various personal needs has been a chronic problem faced by the general public in developing countries like India.