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Tel: 09746459432 09341250256 080 – 22221707 |
Mail: fraternalfund@gmail.com |
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| 1) What is a Chit ? Chit is a mutually beneficial scheme where in a group of people contribute towards the chit value and one member from the group is given the prize amount and the dividends are distributed to all the other members. All the subscribers get the chit amount by turns with a liability to pay future subscriptions. 2) What are the terms in chitty Acts, Foreman, Chit Amount, Discount, Foreman Commission, Dividend money ? Foreman "Foreman" means the person who, under the chit agreement is responsible for the conduct of the Chit and includes all persons taking his place under the Act. Chit amount: Chitty amount" or 'sala' means the sum total of the subscriptions payable by all the subscribers for any installment without any deduction for discount. Discount Discount” means the sum of money, which a prized subscriber is, under the terms of the chit agreement required to forego for the payment of 'dividend'; foreman's commission or such other expenses. Dividend. Dividend means the share of a subscriber in the discount available under the Chit Agreement for rateable distribution among the subscribers at each installment of the Chit. Chit agreement Chit agreement means the document containing the articles of agreement between the foreman and the subscribers relating to the chit. Forman commission Foreman shall be entitled to a commission or remuneration of 5% of the chit amount at each installment. 3) How does our chit scheme work? A Chit scheme can be illustrated by an example: A Group of 40 persons firm with a foreman ( X ) for Chit value of Rs.1,00,000/- spread over 40 months. As per Chit Act, foreman has to deposit Rs.1,00,000/- in a bank jointly with the Registrar of Chits. Sanction is given by the foreman to commence chit. Thereafter foreman enrolls 39 subscribers (1 Subscriber ie. foreman himself) by collecting Rs.2500/- each from a subscriber. The chit agreement signed by the subscriber is submitted before the Registrar. After verification the Registrar register the Chit and a copy of the Chit Agreement is returned to the Foreman. A copy of the duly Registered Agreement is sent to all the subscribers by the foreman. Thereafter auction date is fixed and is intimated to all the subscribers. The first auction is bid by the Foreman without any deduction as per terms of chit agreement. The second auction is held one month in advance. In the above case, 3 persons are willing to bid chit @ Rs,65000/- since there are more than 1 person to bid @ the lower amount, draw is held. Subscriber burns the draw and he becomes the prized …. The amount of Rs.30000/- (Rs.35000 – Rs.5000) is the discount and is divided among the 40 subscribers which entitles each subscriber Rs.750/-. The 2nd instalment works out to Rs.1750 . The prized subscriber is paid Rs.65000/- after 30 days but before 60 days from the auction. 4) What are Foreman’s responsibilities ? Apart from the rights and duties specified under section 21 and 22 of the chit funds act 1982, foreman is responsible for enrolling the required number of subscribers for each chitand to conduct the same as per the guide lines specified by the board of directors of the company. 5) What are the Laws govern chit business: The chit business is governed by the Indian Chit Act, 1982. As far as out chits are concerned the same is governed by the Indian Chit Act, 1982 and the Chit Fund (Karnataka) Rules, 1983. 6) Where are the chits registered? All our chits are registered with Dy.Registrar of Chits, Central Zone Bangalore or Asst. Registrar, Chits, Bangalore. The relevant sanction order and sanctioning authority details are published in pages of Details of Chit Schemes in this Web Site. 7) What is the security for the subscriber: All our chits are secured against 100% Fixed Deposit with South Indian Bank. The details of Fixed Deposit against each chit is published the page of details of Chit Schemes in this Web Site. 8) What is the guarantee that foreman will make the payment on due date: If the foreman do not make the payment on the due date, the same can be brought to the notice of Registrar of Chits, who will direct the foreman to make the payment. 9) What will happen in case of prized subscriber do not make in future payment in time: It is the responsibility of the foreman to collect the payment from prized subscriber. Failure on the part of the prized subscriber to make payment is not a reason for delay of payment by foreman to the prized subscriber. As spelt out in chit agreement, the foreman can approach the Registrar for recovery of payment from the prized subscribers. 10) In case of grievances what are the avenues open for the subscriber for the redressal of the same. Any violation of chit agreement can be brought to the notice of Registrar of chits. 11) Can the chit subscriber avail loan joins chit company? YES. But this is subject to the terms and conditions set out by the foreman. 12) Can the subscriber verify the books of accounts of the foreman ? YES. By remitting a fee of Rs.5, the non prized subscriber and unpaid prized subscriber can verify all the chit records in which he is a subscriber on the dates of draw. 13) What will happen in case where a non prized subscriber defaults payment: The foreman can substitute the non prized subscriber as per the terms of the chit agreement. 14) What is the rate of return for subscribers for who forms the chit for saving: Normally this varies from 12 – 15% per annum. 15) What are the securities that have to be offered by the prized subscriber against future payment? The prized subscribers of chits shall provide security or sureties of any one of the following types singly or in combination with the other types of the Company. a) Personal sureties b) Fixed Deposits of nationalized/scheduled/banks approved by the company c) Bank guarantee of nationalized / scheduled / banks approved by the company d) Life insurance policies e) Non-prized Chit Pass books f) Govt securities and other securities g) Immovable properties 16) What are the advantages compared to Govt. Chits: 1) Better Dividend 2) Easy Documentation 3) 100% Transparency 4) Better Customer Relationship |