RBI allows investment in chit funds for NRIs on a non-repatriation basis

The Reserve Bank of India (RBI) has announced that non-resident Indians (NRIs) can make investments in chit funds in India on a non-repatriation basis without any ceiling. This implies that an NRI can get back the proceeds of such investments only in rupee. Earlier, NRIs were not allowed to invest in companies that were engaged in the business of chit funds. The Chit funds for NRI will encourage flow of capital into the country.

The Central Bank has also notified that the subscription to the chit funds should be brought in through normal banking channel, including through an account maintained with a bank in India. The RBI has stated that investments can be made to chit funds approved by the Registrar of Chits or an officer authorized by the State Government for receiving NRI funds.

The Reserve Bank said the revision in the guidelines were made in consultation with the government.

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