Refer Chit Fund Bill to select committee for more clarity: Congress in Rajya Sabha

New Delhi: The Congress on Tuesday demanded that the Chit Funds (Amendment) Bill, 2019 be referred to a select committee of Rajya Sabha.

The Bill to amend the Chit Funds Act, 1982 seeks to facilitate the orderly growth of chit fund sector to remove bottlenecks and enable greater financial access to people.

The Bill has been passed by Lok Sabha earlier this month.

It was moved in Rajya Sabha for its consideration and passage by Minister of State for Finance Anurag Thakur. He urged the members to pass Bill, saying it does not mix ponzi schemes and unregulated chit funds with regulated chit funds.

Congress member P Bhattacharya said, "The parliamentary standing committee on fiance's recommendations have not been mentioned here. You have not given us the committee report. You have good intention. Can you not send this bill to a select committee to review the report (suggestions) of the parliamentary standing committee."

Some members also highlighted lack of clarity on the Bill and sought stringent punishments for violators.

Nominated member Narendra Jadhav said the penalty of two years imprisonment and Rs 5,000 fine is inadequate under the law which needs to be enhanced.

Supporting the Bill, he also suggested that there is need for penalty for individuals and companies duping people.

TMC leader Manish Gupta also supported the Bill but said that a legislation to deal with the problem must be deep-rooted.

He also highlighted inability of RBI and SEBI in regulating chit funds in the country, saying multiple agencies are operating in the country to deal with the sector.

Supporting the Bill, K Gokulkrishnan of the AIADMK said small players should be exempted from the Bill.

He said that small players should not be subject to regulation under the law.

Supporting the Bill, Ravi Prakash Verma said that the transactions of the chit fund schemes should be done through banking system.

Amar Patnaik of the BJD said, "An integrated approach is not there in the bill. There was lack of regulatory control and investors awareness (which led to frauds)."

He demanded that the capital adequacy norms should be increased to insulate investors.

He said that the changes in the proposed Bill are cosmetic and have not gone to the root of the problem and sought to bring much more stringent provisions in the law to regulate chit funds in the

country. Ram Nath Thakur of the JDU supported the Bill and asked the government to expedite the 166 chit fund fraud cases pending with the CBI.

BJP member Anil Jain also participated in the debate.

Under the legislation, the prescribed ceiling of aggregate chit fund amount for individuals has been raised from one lakh rupees to three lakh rupees and in case of firms, the limit has been raised from 6 lakh to 18 lakh rupees.