Govt tightens norms for functioning of chit fund companies

New Delhi, Feb 06: The Union Cabinet on Wednesday approved proposals to amend the Banning of Unregulated Deposit Schemes Bill, 2018.

This will further strengthen the bill in its objective to effectively tackle the menace of illicit deposit-taking activities, and prevent such schemes from duping the poor, Law Minister Ravi Shankar Prasad said while briefing the media after the Cabinet meeting here.

The bill provides for severe punishment and heavy pecuniary fines to act as deterrent, he said.

It has adequate provisions for disgorgement or repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally, Prasad added. The CBI has lodged about 166 cases in the last four years in chit funds and multi-crore scams, with the maximum in West Bengal and Odisha, he said.