Door No 24-12-1202/26, Attavara Road, Nforce Lezorin Apt, Ist Floor, Shop No 4, Nandigudda ,Attavara, Mangalore -575002
CHITS is a great source of financing for different types of people, such as small investors, entrepreneurs, small-scale industrialists, etc. CHITS can be used to save for any eventuality that requires a substantial amount. It is a good option for anyone who wants to save or borrow money in order to cover special expenses such as weddings, house construction, etc.
It is important to take care when selecting a group. The choice of a Group is largely dependent on the ability of the subscriber to continue to have surplus funds each month. This is important from the point of view of both the subscriber and the Company to avoid embarrassment when releasing prize money or releasing chit payments month after month.
The foreman (also known as the promoter) and the subscribers who sign up voluntarily have a CONTRACT. It is a FINANCIAL SYSTEM whereby the regular and periodic savings of a group are made available each month to every subscriber.
The pooled funds are offered every month to the subscribers in AUCTIONS. The subscriber who bids the highest DISCOUNT will be declared the PRIZE-WINNER. The prized subscriber should also continue to pay subscriptions until the end of the Chit. Dividends are distributed to subscribers based on the amount of discount that was foregone, less any foreman's commission.
Chit groups are a group of a certain number of people who agree to pay a specific amount over a period. As an example, 40 members for 40 months at Rs.500/month. The number of members must be the same as the number of months.
The Act includes the person who is responsible for the conduct and the Chit, including any other person, such as a branch manager.
No. The voucher is only valid for the duration and payment of the CHIT GROUP.
a) To accumulate small amounts in order to receive a lump sum during the period of Chit.
b) To advance borrow future savings. Some subscribers subscribe to chit funds in order to borrow money, and others to invest.
The Chit Agreement is a contract that exists between the foreman of a group and each subscriber. This is a set of by-laws that govern the conduct of chits. The chit agreement will be signed twice, with witnesses. The chit agreements will contain the following: the name and address, number of tickets, number of instalments, and instalment amounts payable, interest/penalty, the probable date of commencement and duration of Chit, manner of deciding prize winners at each instalment, maximum discount at each instalment, mode, and proportion for dividend and foreman’s' commission, date, time, and place of auctions, instalment in which foreman gets the Chit, name of the Bank, security provided by the prized subscriber The declarations of all subscribers are separated from the application forms, pasted on a sheet of paper and submitted to the registrar.
Subscribers must fill out an application form with their name, address, and salary. They also need to list their nominees and the relationship between them. The subscribers must also sign a declaration that they understand and have read the Chit Agreement terms & conditions.
1.1 Good source of finance for all contingencies.
Saving or borrowing for special expenses such as a wedding or the purchase or construction of a home or apartment
1.2 Finance for Businessmen
Details About Groups Available. The branch can provide you with information on the available groups, the auction method, and the type of security needed.
Suppose the subscriber has more than one prized Chit at the same branch or in other branches of the Company. In that case, the total future liability is taken into consideration for security purposes.
The subscriber can choose a group based on their ability to pay each month and also if they have the means to provide sufficient security.
Subscribers can seek guidance from the branch or for any other matter.
The management reserves the right to admit chits.
To participate in the auction, subscribers must pay their monthly instalments by cash, cheque, or D.D. on or before the deadline. For the purpose of participating in the auction, cheques must have been cashed prior to the auction date.
Subscribers receive notification cards every month (within seven days of the auction) containing information about the bid amount at the previous auction, the monthly payment due, the date of the next auction, and the due date for payments. Intimation cards are sent to subscribers every month. They contain details of the bid amount in the last auction, monthly instalment payable, any payable due date, next auction date, and payment deadline.
If you fail to pay your instalments on time, both the prized subscribers and the non-priced subscribers will forfeit their dividends. You may also be charged interest according to what is stated in your chit-agreement. Non-priced subscribers will be disqualified from the auction if they fail to pay their monthly subscription.
3.4 Cheques drawn by outstation subscribers on any member bank of the Banker's Clearing House will only be accepted as par.
3.5 In the event that cheques are returned unpaid, subscriptions for future years will only be accepted in cash. The Bank will recover the penalty charges incurred by it in relation to such cheques that are dishonoured by the subscriber.
To make it easier for subscribers, all branches in Karnataka accept monthly payments even if they do not originate from that branch. This service is provided at no cost. The Company will not be responsible if details of remittance are not received before the auction by the branch where the Chit was held.
The Deputy Registrar will not allow prized subscribers who have defaulted on their subscriptions to pay in any branch other than that where the Chit was held. However, if such subscribers pay such an amount in an "other branch," such an amount will only be considered as "on account" and not as relating to a particular instalment.
It is recommended that subscribers only give "Account Payees" checks in the name of the Company. It is strongly advised that you do not issue blank checks or self-cheques to our collection agents.
Suppose a subscriber receives a notice pursuant to Sec.33, even though they have remitted their latest instalment at another branch of the firm. In that case, the subscriber must produce the receipt and bring the matter to a resolution.
Auction determines eligibility for prize money. Subscribers can only bid up to 40% in all auctions, starting with the second instalment. If more than one subscriber provides the same discount, the winning subscribers are determined by lot.
4.2 The auction will last 5 minutes. Each group is given a time on a certain date. The branches and individual customers will be informed if the auction falls on a public holiday or due to an unforeseen event, the time and date of the auction must be altered.
4.3 Subscriptions may be made by the subscriber in person or through an authorized representative. It is required to have written authorization. Subscribers can also submit offers by writing in a sealed cover, superscribing it as follows: "Bid Offer to be opened only at the time auction is held for Group No .......... auction on ..............."
4.5 Telephonic/Telegraphic offers are not accepted. If you pay cash for your subscription on the day of the auction, the original receipt must be presented at the auction.
The only branch where the chits are held should receive any requests for an offer, tender, or inclusion in a lot.
Suppose a non-prized ticket subscriber has pledged his Chit to another prized ticket. In that case, he can only participate in the auction when the prized ticket is fully paid off or if acceptable alternative security is provided and the lien is removed.
If you have given a standing offer, it is important to check the current trend and adjust your bid if needed.
All chits issued after October 2008 will have a foreman's commission of 5.25% deducted, and the remainder will be distributed equally to all eligible subscribers. Dividends will be adjusted for the next installment. Our branches will offer four groups of 30,40,50 and 60-month duration as per our current policy.
6.1 The prize will be paid out to the successful bidder on the day prior to the next auction on the condition that satisfactory and adequate security is provided to cover all future liabilities of all chits owned by the subscriber across all branches.
6.2 Only "A/c payee cheques" will be used to release prize money. Outstation subscribers can pay by bank draft if they wish, but the D.D. commission will be deducted if a branch of their Company's Bank is located there.
6. From 01-06-1997, a 'Service tax' of 18% is levied on all Prize Money that each Prized subscriber receives. The rate may change according to government orders. Change of Address
Under acknowledgment, any change in address for a prized or non-priced subscriber and guarantors of prized chits must be immediately communicated to the foreman. The foreman will not be responsible if the foreman does not receive any notification or intimation from him in relation to their Chit unless they have made the proper intimation.
It is recommended that subscribers keep an eye on the bidding trend each month and then bid at the most convenient time.
The information above is a general overview of the procedure. The Chit Funds Act 1982, its Rules, and the Chit Agreement will be the final decision for all purposes. All information is available at the Chit branches. You may have certain grievances or difficulties with the branch. Such cases can be referred to the Divisional/Regional Manager/Zonal Chief Executive concerned for immediate attention. If you still find it difficult, you can write to:
Door No 24-12-1202/26, Attavara Road, Nforce Lezorin Apt, Ist Floor,
Shop No 4, Nandigudda ,Attavara, Mangalore -575002
Mob: 7353020107, 7353020109
Email : shrimangaladevi.chits@gmail.com