Info

1 . CHITS & BENEFITS : –

Chits is a unique indigenous and highly beneficial financial instrument. It provides a good source of finance for different class of people from small investors and business men to industries. It also provides means of savings for contingencies requiring substantial amounts. Chit is, therefore a good medium for persons desirous of savings as well as people who like to borrow to meet expenses on contingencies and special occasion like marriages. construction etc., even funds for business or industry.

2 . REMITTANCE & SUBSCRIPTION :-

• The payment towards the chit is made in prescribed monthly First two instalments are to be paid in full. The dividend starts from 3rd instalment onwards. Every month within 7/10 days after the auction, an intimation card containing details about the chit, bid amount in the last auction date, monthly instalment and any other payments due, due date of payment etc., is sent to the subscribers to enable them to know the result of the auction & to facilitate remittance of the subscription in time.

• Due care is taken to ensure that the intimation cards are sent to the subscribers in advance to enable them to pay the However non receipt of intimation cards due to any reason or postal delays cannot be accepted as valid reason for belated payment or non-payments. Incase the intimation card does not reach in time subscribers may remit amount equivalent to the previous month’s due and difference, if any will be adjusted during the subsequent month.

• To facilitate the remittance and as additional facility to subscribers, monthly subscriptions are accepted in any of our branches provided it is accompanied by the intimation cards sent by the branch to ensure proper accounting. It is essential that remittances should always be with reference to the current intimation Subscriptions are accepted at all our branches.

• To participate in the auction. The subscription has to be paid 10 days in advance if it is paid at any branch other than where it is

• Outstation subscribers may pay amount by D. sent to the branch by post.

• In cases, where the cheque given by subscriber is dishonored, future subscriptions will be accepted only in cash / D. In respect such dishonored cheques, the penalty charges by the bank will be recovered from the subscriber. As there is a penal provision in the Negotiable instruments Act for dishonor of cheques Due to insufficient fund it is better to avoid such a situation.

• Failure to remit installments in time will entail forfeiture of dividend, besides charging penal interest as notified In respect of non prized subscribers defaulting in payment of monthly installments will disqualify them from participating in the auction.

3 . CHITS & BENEFITS : –

Pass books will be supplied to the members on remittance of 2nd It should be submitted for entries along with the remittance for updating.If the pass book is lost, duplicate can be obtained by paying Rs. 25/-

4 . AUCTION PROCEDURE : –

4.1 Every subscriber is eligible to participate in auction held once in a month for each group. The duration of the auction shall be five minutes. Participation in the auction could be either in person or written or through duly authorised representative. Subscriber participating in auction after paying subscription in cash on the very date of auction must necessarily produce the original receipt at the time of auction.

• 4.2 A specific date & time of auction is being assigned for the chit group and sans a holiday for any reason, it is held on the specified date and time. If there is any change in the date, and time of auction, notice is given to subscribers regarding the revised date to our branches for the information of the

• 4.3 The bid offers can also be sent through branch 10 days in advance of the auction Fresh bidoffers has to be given before every auction.

• 4.4 Individual request from the subscribers is a must : by specific request for each auction for inclusion in the monthly lot whenever the chit has to be decided by lot. The bids in the auction should be raised by slabs fixed by

• 4.5 Telephone/Telegraphic offers are not accepted

• 4.6 In all the groups a minimum discount is 5% and maximum discount is 40%. If more than one member opts for 40% a draw will be conducted to decide the prized

• 4.7 The subscriber who bids for the highest amount of discount within stipulated time will be confirmed as the Prized subscriber. There are some groups where the result of auction is decided on the basis of sealed tenders. the subscriber has to give his offer in a sealed cover which will be opened at the time of auction in the presence of the subscribers of the group present and the successful bidder will be decided. If no tenders are received, no subscriber is present personally or there is no authorised representative, the Prized Subscriber shall be determined by lot for the minimum discount.

5 . DISTRIBUTION OF DIVIDEND :-

• The dividend at every auction shall be equally distributed by way of deduction in the next instalment to the The dividend so calculated is less Foreman’s commission at 5% of the chit valuefirst two instalments are to be paid in full without any dividend

• On the basis of the intimation card, prized and non prized subscribers are expected to remit the monthly instalments on or before the due date referred to. In case of any delay in remitting the monthly subscriptions by prized or non subscribers, beside forfeiture of the dividend. penal interest at an appropriate rate will be charged.

6 . RELEASE OF PRIZE MONEY

6.1 The prize money will be paid to the successful subscriber before the next auction date if adequate securities furnished to cover the future liability of the chit. Proper security in the form of Personal Guarantee, Bank Immovable property or any other form of security has to be provided to the satisfaction of the Foreman for the release of the Prize Money (The detailed information for various groups can be found in a page – 3). The nature of security indicated normally applies for one chit. Where a subscriber holds more than one chit, the combined future liability alone will be taken into account for the purpose of security.

6.2 For this purpose, the combined future liability in respect of cases where a subscribers holds more than one chit in the same branch or in different branches will be taken into account. In case a subscriber from one chit group has stood as guarantor for some other subscriber, either in the same group or in other group, for the purpose of arriving at the total liability, all such future commitment will also be taken into consideration. Only at the discretion of the Company, persons can stand surety to more than one

6.3 After the auction the proposed security/surety to be provided has to be discussed by the prized subscribers with the Branch In charge to his satisfaction. Later completed proposal form has to be submitted for further documentation within 7 days from the date of the

6.4 The document based on the proposal form will be prepared and have to be signed by subscriber and the guarantors in the presence of the officials of the concerned branch or any other specified authorities of the organisation

6.5 Prize money will be released by “Account Payee” cheque only. In respect of outstation subscribers payment may be made through bank draft after deducting the D.D. Charge.

6.6 Processing charge is payable by the subscriber at the time of release of Prize Money.

6.7 As per Government rule Goods & Service Tax of 12.% will be levied on Foreman Commission in respect of every
Prize Money w.e.f. 1-7-2017.

7 . RE – AUCTION

If the prized bidder fails to claim the prize money within 60 days from the date of auction, re-auction will be conducted as per section 22(2) of Central Chit Funds Act 1982. Consequent to this the earlier dividend declared will stand cancelled and the difference in dividend. If any, shall by recoverable from him.

8 . DISCONTINUATION

Chit is a scheme where the system works effectively only on the payment from all the members of the group. Hence discontinuation by any member hampers the group itself and works against the interest of other members of the group. However in case of inability to pay the subscription by any member there are 2 options.

(A) SUBSTITUTION :

In case such discontinuing subscriber is unable to provide a transfer he/she can request the Company to have a substitute in his/her place. In such cases the Company cannot commit any time period tor substitution. As and when the Company is able to get a substitute, the amount will be refunded to the original subscriber after deducting 5% of the foreman’s commission. It may also happen that the Company may be unable to get a suitable substitute. In such a case, the amount will be refunded only after the termination of the group and deducting 5% foreman’s commission

When the future liability is up to Rs. 50,000/- one Government Surety with a Net Salary of Rs. 8,000/- from Rs. 50,000/- to 1 lakh two Government Surety with net salary to Rs. 10,000/-, 1 lakh to 2 lakh two government surety with net salary Rs. 12,000/- from Rs. 2 lakh up to 5 lakh three Government Sureties with a net salary of Rs. 15,000/- and above Rs. 5 lakh LIC Policies or immovable property whose value is one and half times the future liability., Sureties of Employees working in Pvt. Companies/Firms are not considered., Salary certificates of Government Employees should be original, latest and bear the office address-seal and Employee’s Specimen Signature. others are not considered. Employees must have Minimum Service of 6 years for Retirement., Salary certificates of Group ‘D’ Employees like Peon, Watchman, Gardener etc., are not considered.