Reserve Bank allows NRIs to invest in chit funds

Mumbai: The Reserve Bank allowed non-resident Indians (NRIs) to invest in chit funds on non-repatriation basis without any ceiling, a move that will  encourage flow of capital into the country.  However, the subscription to the chit funds should be  brought in through normal banking channel, including through  an account maintained with a bank in India. 

Earlier in May 2000, non-residents were barred from  investing in a company or firms engaged in the business of  chit fund. Revising the extant guidelines for subscription to the  chit funds, RBI said: "It has been decided to permit NRIs to  subscribe to the chit funds, without limit, on  non-repatriation". 

It further said the Registrar of Chits or an officer  authorised by the State Government may permit any chit fund to  accept subscription from NRIs on non-repatriation basis. RBI said the revision in the guidelines were made in  consultation with the government.