Model chit funds bill

The Banking Commission, which was set up by the Government of India in February 1969 and submitted its report in January 1972, examined in some detail the working of chit funds in the country and recommended the need for a uniform chit fund regulation applicable to the whole country. It sug gested the enactment of either an All-India Chit Funds Act or a Model Law to be framed by the Central Government and - adopted by the State Governments, with suitable modifications.

The Government of India accepted the recommendation of the Commission about a Model Law to regulate chit business to be formulated for adoption by all the States. Pursuant to this decision, the Reserve Bank of India, at the instance of the Central Government, drafted a Model Chit Funds Bill. The Bill was referred to the Study Group on Non-Banking Companies cons tituted by the Reserve Bank of India in June 1974, under the Chairmanship of Shri James S. Raj. The views expressed by the Study Group on the Model Bill were incorporated by the Reserve Bank in the Bill and submitted to the Central Government. The Government of India circulated the Bill to the State Govern ments for their views before consideration by Parliament. It is not known if all the State Governments have forwarded their views on the Bill to the Centre. The Bill, when enacted as a Central Act, will be administered by the State Governments.