Jaitley: Govt drafting law to regulate chit fund schemes

RSTV Bureau
New Delhi: Finance Minister Arun Jaitley speaks in the Lok Sabha during the ongoing monsoon session of Parliament, in New Delhi on August 3, 2017. PTI Photo/TV Grab

New Delhi: Finance Minister Arun Jaitley speaks in the Lok Sabha during the ongoing monsoon session of Parliament, in New Delhi on August 3, 2017. PTI Photo/TV Grab

The government is drafting a central law to protect people investing in chit fund schemes and will bring the legislation very soon to Parliament, Finance Minister Arun Jaitley said on Thursday.

Replying to a debate on ‘The Banking Regulation (Amendment) Bill, 2017′ in the Lok Sabha, Jaitley said there is a need for a pan-India law to deal with chit fund schemes in addition to state laws which already exist.

During the debate, opposition members had raised the issue of chit funds, because of which investors were duped. Opposition members also sought to know from the government what steps it was planning to take to deal with the issue.

“SEBI is looking into the existing chit fund cases. There are state laws to deal with them in Bengal and Odisha. But what to do with those who run operations throughout the country? We are drafting a central law and very soon we will bring it before you,” Jaitley said.

Jaitley added that the chit fund schemes attract investors by offering a meagre 1-1.5 per cent interest rate higher than what is given by banks.

In the 2017-18 Budget, Jaitley had announced that the government will amend the ‘Multi-state cooperative Act’ as there was an urgent need to protect the poor from dubious chit fund schemes, operated by unscrupulous entities.

Replying to the debate, the finance minister said the government had come out with safer options for investments and the Life Insurance Corporation had launched a pension scheme for senior citizens which offered a fixed 8.3 per cent interest rate on deposits.

Jaitley also added that the government had taken steps to offer stable interest rates to investors so that they were not lured into chit fund schemes.

(With inputs from PTI)