Parliament on Thursday passed a bill which seeks to raise the monetary limits for chit funds and commission for foreman. The Chit Funds (Amendment) Bill, 2019 was passed by voice vote in Rajya Sabha. The bill got Lok Sabha's nod on November 20.
The maximum chit amount is proposed to be raised from Rs 1 lakh to Rs 3 lakh for those managed by individuals or less than four partners, and from Rs 6 lakh to Rs 18 lakh for firms with four or more partners.
The maximum commission for foreman, who is responsible for managing the chit, is proposed to be raised from 5 per cent to 7 per cent. The bill also allows the foreman a right to lien against the credit balance from subscribers.
The bill also introduces words such as fraternity fund, rotating savings and credit institution to make chit funds more respectable.