It represents a legally binding AGREEMENT between the foreman, acting as the Promoter, and the participants who voluntarily enroll. This system functions as a FINANCIAL MECHANISM, where a group of subscribers regularly contribute a predetermined amount each month for a SPECIFIED DURATION.
Each month, the accumulated funds are made available to the subscribers through AUCTIONS, during which participants place BIDS for the highest DISCOUNT. The individual with the winning bid receives the PRIZE AMOUNT, subject to appropriate security measures. A Prized subscriber is also obligated to continue paying their subscriptions until the chit's conclusion. The portion of the discount, minus the foreman's commission, is then distributed among the subscribers as DIVIDENDS.
A Chit group is a term used to describe a predefined group of members who collectively agree to contribute a predetermined amount of money over a specified period. For instance, a Chit group consist of 40 members, spanning 40 months, with each member contributing Rs. 500 per month. It's essential to note that in a Chit group, the number of members and the duration of the contribution period are always equa
Under the provisions of the Act, an individual responsible for overseeing the operations of the chit is defined as a "Chit Group Supervisor." This term encompasses any person who plays a role in managing the chit, including individuals like branch managers who are carrying out their designated responsibilities within the chit framework.
Subscribers are required to complete an application form, providing details such as their full names, both residential and office addresses, approximate gross monthly income, the names of their nominated individuals, and their respective relationships. Additionally, they are expected to confirm their understanding of the terms and conditions outlined in the Chit Agreement by signing a declaration.
