Introducing the bill, the Minister said that it is designed to make chit funds more user-friendly, transparent and lower compliance burden.
"We have brought the bill to protect the interests of small investors," Thakur said while moving the bill for consideration.
The bill seeks to amend Chit Funds Act, 1982. Chit funds are popular among low-income group people as it offers them an instrument to save and also borrow money when in need.
Alongside banks and other institutions, chit funds have played an important role in financial inclusion. It provides easy access to funds and investment avenues.
In his opening statement on the bill, the Minister said that chit funds are legal if registered.
"Some people associate it with unregulated or ponzi schemes. I want to bring it to the notice of the House that chit funds are legal, if registered," Thakur said.
The Chit Funds (Amendment) Bill, 2019 proposes to raise the monetary limits for chit funds by three times and the commission for the person managing the fund to 7 per cent from 5 per cent now.
Accordingly, the limit for individuals has been raised to Rs 3 lakh, up from the present Rs 1 lakh. For firms, the limit would be 18 lakhs from Rs 6 lakh, currently.
( With inputs from IANS )