RBI allows NRIs to subscribe chit funds
Reserve Bank of Indian has allowed non-resident Indians (NRIs) to invest in chit fund to encourage flow of capital into the country.
Decision in this regard was taken after RBI had revised the extant guidelines for subscription to the chit funds in consultation with the government.
Henceforth, NRIs on non-repatriation basis will be allowed to invest in chit fund without any ceiling. However, the subscription to the chit funds by NRIs will be mandatorily brought in through normal banking channel, including through an account maintained with a bank in India.
The state government may permit any chit fund to accept subscription from NRIs on non-repatriation basis. It will be permitted by the registrar of chits or an officer authorized by the state government in accordance with the provisions of the Chit Fund Act, 1982.
Earlier in May 2000, RBI had barred NRIs from investing in a company or firms engaged in the business of chit fund.
Apart from this decision, RBI also extended the scheme allowing airline companies to raise external commercial borrowings (ECB) for working capital as a permissible end-use under the approval route. Now, the ECB scheme will continue till March 31, 2016.