The Union Cabinet has approved this bill to reduce the regulatory or compliance burden of the registered Chit Funds Industry.

The Union Cabinet approved the Introduction of Chit Funds (Amendment) Bill, 2019 in Parliament. It is aimed at reducing the regulatory or compliance burden of the registered Chit Funds Industry and protect the interests of the Chit subscribers. It will amend the Chit Fund Act 1982. The new bill will be incorporating the recommendations of the Parliamentary Standing Committee. The changes may be similar to the bill of 2018. The committee recommended that bill should incorporate insurance coverage for the chit fund subscribers where the cost must be borne by the chit fund company. It may allow a chit fund company to mention under their name as 'A ROSCA Institution' (Rotating Savings & Credit Association). This will help in distinguishing their business from other unconnected business. The old Bill had a provision for incorporating the name 'fraternity fund' instead of the commonly known 'chit fund.' Hereafter, words 'A ROSCA Institution' will be added to the nomenclature 'fraternity fund'.