“SEBI is looking into the existing chit fund cases. There are state laws to deal with them in Bengal and Odisha. But what to do with those who run operations throughout the country? We are drafting a central law and very soon we will bring it before you,” said Jaitley, while replying to a debate on the Banking Regulation (Amendment) Bill 2017 in Lok Sabha.
According to Jaitley, the chit fund schemes attracted several investors by offering nearly 1-1.5 per cent interest higher than the nationalised banks.
“The government will soon come up with a central law to deal with chit funds,” said Finance Minister Arun Jaitley.
In his reply, he further said that the Reserve Bank of India will get into resolving bad loans. In addition to this, he agreed that public sector banks that strongly try to look into the matter of nonperforming assets face the trouble of being questioned by investigating agencies later.
Recently Lok Sabha cleared the Banking Regulation (Amendment) Bill 2017 passed the bill, which will replace an ordinance that had enabled powers on the Centre to authorise the RBI to issue directions to banks to initiate insolvency proceedings against loan defaulters.
During the debate, the Opposition had wanted to know what steps the government would take to deal with chit funds in which investors were duped. In his last budget, Jaitley had promised to amend the Multi-state Cooperative Act to protect investors.