Minister of State for Finance Anurag Thakur moved the Chit Funds (Amendment) Bill, 2019 for consideration in the Lok Sabha on Monday. The Bill seeks to amend the Chit Funds Act, 1982, which regulates chit funds and prohibits a fund from being created without prior sanction of a state government.
Moving the Bill, Thakur said chit funds were an important source of finance for small businesses and households and though many people viewed chit funds in a negative manner, they were useful to those who had no other means of savings or taking credit from banks.
Under a chit fund, people agree to release a certain amount from time to time into a fund. Periodically, one of the subscribers is chosen by drawing a chit to receive the prize amount from the fund.
The Chit Funds (Amendment) Bill, 2019 was introduced in the Lok Sabha on August 5, 2019. The Bill specifies various names which may be used to refer to a chit fund, including “fraternity fund” and “rotating savings and credit institution”. The legislation seeks to increase the commission of a foreman to 7 per cent.
The discussion was marked by heated exchanges between the treasury and opposition benches. “Don’t turn the Lok Sabha into the West Bengal Assembly,” Speaker Om Birla told members of the ruling BJP and Trinamool Congress. The trigger was a remark by BJP member Locket Chatterjee who alleged that the “entire TMC is involved in chit fund irregularities, duping gullible investors of their hard-earned money”.
Without naming Mamata Banerjee, she alleged that the West Bengal Chief Minister was protecting those who had run away with poor people's money. Chatterjee also alleged that 40 per cent of the money collected by various chit funds in West Bengal had gone to agents who were members of the TMC.
She was challenged by Trinamool member Kalyan Banerjee. The Chair intervened to restore order in the House.