Kerala Planning Board moots chit fund rule revamp

Kochi: The Kerala Chit Fund Rules 2012 should be simplified to avoid procedural delays and bring efficiency in services delivery, according a working group report by Kerala State Planning Board. The procedural formalities for the registration of chits “shall be simplified so as to complete the process more efficiently and without delay”, the report on the Non-Banking Financial Institutions in Kerala, said.

The suggestions made by the report included rationalization of the registration cost, release of the security deposit within 30 working days of the termination of the chits and digitization of the documentation process connected with registration of chits. “Cost of registration of chits shall be rational and at par with that of other states. Reduction of stamp duty for the registration of chitty can reduce the cost of registration”, the report said. Another major suggestion made by the working group is the automation and computerisation of documentation connected with chitty.

“Office automation and computerisation of registrar’s office including facilities for E-filing of all records by the foreman and online auction facility to the subscribers can strengthen the efficiency of the chit fund business” the report said. Calling for speeding up the process of releasing the security deposit the working group report has also called for payment of interest to the security deposit. “Measures shall be taken for the regular payment of interest on chitty security deposits put in the name of the assistant registrar by the chit foreman till the termination of the chits”, the report said.

The report also called for increasing the ceiling of the chit amount to an individual foreman to Rs 1 lakh to Rs 5 lakh and to Rs 5 lakh per partner and up to a maximum of Rs 25 lakh to the partnership firm. The report has observed that considering the volume of work involved in administering the chit fund industry, a separate department for chitty can be considered.