| 1. |
What
is a Chit? |
|
It
is a CONTRACT between the foreman, as the
Promoter is called, and the subscribers, who
join voluntarily. It is a FINANCIAL SYSTEM under
which the periodical and regular savings of a
group of subscribers are made available to each
subscriber, a SPECIFIED AMOUNT every month (instalment)
for a SPECIFIED PERIOD.
The
Pooled funds every month are offered to the
subscribers at monthly AUCTIONS and the
subscriber who BIDS for the highest DISCOUNT is
declared the PRIZE WINNER and given the PRIZE
AMOUNT on proper security. A Prized subscriber
also should continue to pay the subscriptions
till the termination of the chit. The amount
foregone as discount, less foreman?s
commission is distributed among the subscribers
as dividend.
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| 2. |
What
is a Chit group? |
|
A
Chit group refers to a specified number of
members agreeing to subscribe a specified amount
for a specified period. For example, 40 members,
40 months, Rs.500/- a month. The number of
members and the number of months are to be the
same.
|
| 3. |
Who
is a foreman? |
|
Any
person under the Act responsible for the conduct
of the chit and includes any Person, such as
branch manager, discharging his functions.
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| 4. |
Is
the contract of the subscribers with the foreman
valid for an indefinite period?
|
|
No.
It is valid only for the duration of a CHIT
GROUP and until the liabilities of subscribers
to foreman or vice versa are discharged or paid
in full.
|
| 5. |
What
are the benefits of chit Subscribers? |
|
a)
To save in small amounts to receive a lump sum
during the period of chit.
b) To borrow the future savings in advance. Some
subscribers join chit funds to borrow and others
to save.
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| 6. |
What
is Chit agreement? |
|
The
Chit agreement is a contract between the foreman
and the individual subscribers to a chit group.
It is a set of bye-laws or regulations dealing
with the procedure for the conduct of chits. It
will be signed in duplicate, duly witnessed. The
chit agreements shall contain the name and
address of the subscriber, the number of tickets
allotted to him, the number of instalments and
the instalment amount payable, the
interest/penalty for delayed payment, the
probable date of commencement of chit and its
duration, the manner of deciding the prize
winner at each instalment, the maximum discount
to be foregone at each instalment, the mode and
proportion of dividend and foreman?s
commission, the date, time and place of auction,
the instalment at which the foreman is to get
the chit amount, the name of the bank, the
security to be furnished by prized subscriber
etc., Though each subscriber is supposed to sign
the chit agreement, in practice, each subscriber
signs a declaration in the application form that
he has read and understood the terms and
conditions of the Chit Agreement. The
declaration of all the subscribers are detached
from the application form, pasted in a piece of
paper and filed with the registrar.
|
| 7. |
How
are the subscribers enrolled for a group? |
|
The
subscribers have to fill in an application form
furnishing particulars of their names,
residential and office addresses, approximate
gross monthly salary, names of nominees and
their relationship to them. They also have to
sign the declaration that they have read and
understood the terms & conditions of the
Chit Agreement.
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| |
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| |
BENEFITS OF CHIT |
|
1.1 |
A good source of Finance for all contigencies. |
|
1.2 |
Way of saving or borrowing to meet Special
expenses like marriage or building or purchase
of a house or flat |
|
1.3 |
Source of finance for businessmen |
| |
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| 2. |
DETAILS OF GROUPS AVAILABLE ETC., |
| 2.1 |
Details of groups available and other
information as to the mode of auction and nature
of security required are available the branch. |
| 2.2 |
The security indicated will normally apply for
one chit .If the subscriber holds more than one
prized chit in the same branch or other branches
of the Company, the combined future liability
will be taken into account for the purpose of
security. |
| 2.3 |
The subscriber may select a suitable group
depending upon his capacity to pay monthly and
also on his ability to provide adequate
security, immovable or otherwise. |
| 2.4 |
Subscribers may seek the guidance or the branch
in all matters. |
| 2.5 |
Right of admission to chits is reserved by
management. |
| |
|
| 3. |
REMITTANCE OF SUBSCRIPTION |
| 3.1 |
Subscribers must pay the monthly instalments on
or before the due date either by cash or cheque
or D.D to pariticipate in the auction. Cheques
should have been encashed before the date
of the auction for eligibilty to participate in
the auction. |
| 3.2 |
Every month, immediately after the auction
(within 7 days) intimation cards containing
details of bid amount in the last auction,
monthly instalment payable , any payable du,
date of next auction, due date for payment etc.,
are send to the subscribers. no-receipt of
intimation card will not be accepted as an
excuse for non-payment or belated payment. |
| 3.3 |
Failure to remit instalments in time by both
prized and non-prized subscribers will entail
forfeiture of dividend besides being charged
interest as detailed in chit agreement. In
respect of non-prized subscribers, default in
payment of monthly subscription will disqualify
them from participating in the auction. |
| 3.4 |
Cheques form outstation subscribers drawn on any
bank which is a member of Banker's clearing
house only will be accepted at par. |
| 3.5 |
If cheques given are dishonoured, future
subscription will be accepted only in cash.
Penalty charges by the Bank in respect of such
dishonoured cheques will be recovered from the
subscriber. |
| 3.6 |
To facilitate subscribers, monthly instalments
are being accepted in all branches and Service
Centres in Tamilnadu even if the chit does not
belong to that branch. Such a facility is only
gratuitous. The Company however will not be held
responsible if the remittance details are not
received by the branch in which the chit is held
from the other branch or service centre where
remittance is made before the auction date. |
| 3.7 |
The facility of payment of subscriptions in a
branch other than the branch where the chit is
held, will not be available to defaulted prized
subscribers against whom awards have been passed
by the Deputy Registrar of Chits. If however
such subscribers pays such amount in "other
branch" such amount will be treated as only as
"on account" and not relating to any
particular instalment. |
| 3.8 |
Subscribers are advised to give only "Account
Payee" cheques in the name of the Company.
Issuing blank cheques or Self cheques to our
collection agents should be strictly avoided. |
| 3.9 |
In the event of a prized subscriber
receiving a notice under Sec.33 even though he
had remitted the uptodate instalment in another
branch of the company, it is the duty of the
subscriber to produce such receipt to the branch
where his chit is held and reconcile the matter. |
| |
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| 4. |
PROCEDURE FOR AUCTION |
| 4.1 |
Eligibility for prize money is determined by
auction. In all auctions commencing from the 2nd
instalment, subscribers can bid upto a
maximum of 40% only. if more than one subscriber
offers identical discount, the prized
subscribers will be determined by lot. The bid
amount shall be in multiples of Rs. 50. the
minimum discount foregone shall be not less than
the foreman's commission for the group. |
| 4.2 |
The duration of auction will be 5 minutes.
Specific time is assigned for each group
on a specific date. If the auction date falls on
a holiday or if owing to unforeseen cause the
date and time have to be changed, such change of
time/date will be notified individually and also
in the branches. |
| 4.3 |
Subscribers can participate either in person or
through a duly authorised representative.
Written authorisation is necessary. |
| 4.4 |
The subscribers can also communicate offers in
writting in a closed cover superscribing as :
"Bid offer to be opened at the time of auction
only, for Group No.......... auction on
..............." |
| 4.5 |
Telephonic/Telegraphic offers are not accepted.
Original receipt should be produced at the time
of auction, if cash payment of subscription is
made on the date of auction. |
| 4.6 |
The request for offer/ tender/ Inclusion in lot
should be presented only at the branch in which
chit is held. |
| 4.7 |
Whenever a non-prized subscriber has given
his chit under lien to another prized ticket,
such non-prized subscriber can participate in
auction only when the liabilities of the prized
ticket are fully paid or alternative acceptable
security is offered and the lien is lifted. |
| 5. |
Subscribers who had given standing offers should
ascertain the trend of bidding and modify their
offers if necessary. |
| 5.1 |
Distribution of Dividend
|
| 5.2 |
5% of the chit value shall be deducted from the
amount towards foreman commission and the
balance distributed as dividend equally among
all eligibile subscribers in all chts started
after October 2008. The dividend will be
adjusted in subscription for the next instalment |
| |
As per the present policy four groups with
30,40,50 and 60 months duration will be floated
by our branches. |
| 6 |
RELEASE OF PRIZE MONEY |
| 6.1 |
The prize money will be paid to the successful
subscriber on a working day before the next
auction date on the basis of adequate
and satisfactory security, offered to cover the
combined future liability of all chits held by
the subscriber in all branches of the company. |
| 6.2 |
Prize money will be released by "A/c Payee
Cheques" only . If payment is desired through
Bank draft by outstation subscribers, it will be
obtained deducting D.D Commission provided a
branch of the bank with whom the company is
having account is functioning there |
| 6. |
With effect from 01-06-2007 'Service Tax' is
leviable from the Prize Money received by every
Prized subscriber at the rate of 12.36% on the
foreman's commission for the Prized Chit. The
rate is liable to change as per government
orders. |
| 7. |
CHANGE OF ADDRESS |
| |
Any change in the address of a subscriber
prized and non-prized and gaurantors in the case
of prized chits should be promptly intimated to
the Foreman under acknowledgement. In the
absense of such proper intimation the
Foreman is not responsible for non-receipt of
any intimation or notice from the Foreman in
connection with their chit. |
|
8. |
SUGGESTIONS |
| |
Subscribers are advised to keep watch over the
trend of bidding every month and at a convenient
point of time, they can bid the chit. There are
opportunities for investing the Prize Money in
attractive Company deposits to ensure a good
return. Shriram Investments Advisory Division
will be able to offer you valuable guidance in
respect of acceptance of deposits by Shriram
Group Companies and subscribers can avail their
free service without any obligation. |
| 9. |
GENERAL |
| |
The above information is indicative of the broad
procedure followed. For all Purposes, the
provisions in the Chit Funds Act, 1982 the Rules
framed thereunder and the Chit agreement will be
final. Chit branches will provide you with all
information required. Sometimes you may face
certain difficulties or grievances against the
branch. You may refer such cases to the
concerned Divisional / Regional Manager / Zonal
Chief Executive for immediate attention. Still
if you find any difficult you may write to :
|
The General Manager |
|
Administrative Office |
|
SHRIRAM CHITS TAMILNADU (P) LTD |
|
Greams Dugar, 4th Floor |
|
No. 149, Greams Road, Chennai-600006 |
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