New Delhi: Emphasising the need for expansion of banking institutions in the country to prevent chit fund scams, the BJD, Monday, put forward several suggestions for improvement in Chit Funds (Amendment) Bill, 2019.
Speaking in the Lok Sabha on behalf of the party, senior BJD MP Bhartruhari Mahtab said that the government should address the basic question of why chit fund companies are flourishing. He emphasised on the need for expansion of banking institutions in the country citing that the lack of banking institutions is responsible for rising chit fund scams.
“The general public, especially the lower-income group, is unable to access banking institutions. Perpetrators lure investors with the promise of high returns and disappear overnight,” said Mahtab.
The senior BJD leader did not find any clause in the Bill that guarantees protection for the investors.
“Chit funds flourish through whisper campaigns. There is no nationwide guideline which all state governments should follow. This leaves the investors vulnerable,” he said.
Mahtab proposed the establishment of a state-level coordination committee for the purpose.
It is to be mentioned here that the Bill was introduced in Lok Sabha August 5. The Bill seeks to amend the Chit Funds Act, 1982. The 1982 Act regulates chit funds, and prohibits a fund from being created without the prior sanction of the state government.