Chit funds have been playing a stellar role even before the advent of the modern banking era, coming to the rescue of people in need at affordable terms.
This system has numerous built-in advantages due to which people prefer this option over other formal financial institutions. These advantages include:
EMERGENCY FUND: The little money saved every month serves as an emergency fund, which can be drawn whenever the need arises.
SIMPLE PROCEDURES: No complex formalities are involved. Procedures are kept as simple as possible with minimal paperwork, making the process convenient for subscribers.
HOMELY ATMOSPHERE: Friendly people and a homely atmosphere with personalised service are offered to every subscriber.
SURE RETURNS: Subscribers can be assured of good returns on any scheme they choose.
SECURE: Your money is safe in the care of the stable company SGA.
As time passes, our growing list of clients reflects the trust reposed in us. Likewise, our commitment to uphold your faith continues. With three decades of personalised service based on trust, we take this opportunity to express our sincere gratitude to all who have made this journey possible.
CHITS provides a good source of finance for different type of people viz., small investors, businessmen, small scale industrialists etc. CHITS is a good means of savings for any contingency requiring substantial amount. It serves all persons whether they desire for savings or borrowing to meet extraordinary expenses on special occasions like Marriages, Construction of houses etc., Adequate care is necessary to choose a suitable Group. The selection of a particular Group, largely depends on the subscriber’s capacity to provide surplus funds month after month from his normal income for this purpose. This aspect is very important for the subscriber as well as the company’s point of view to avoid any embarrassment at the time of releasing the prize money or in releasing chit instalments month after month.
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.
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.
Any person under the Act responsible for the conduct of the chit and includes any Person, such as branch manager, discharging his functions.
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.
The Chit Agreement is a contract between the foreman and the individual subscribers of a chit group. It consists of a set of bye-laws or regulations governing the procedure for the conduct of chits. The agreement is signed in duplicate and duly witnessed.
The Chit Agreement contains details such as the name and address of the subscriber, number of tickets allotted, number of instalments, instalment amount payable, interest or penalty for delayed payment, probable date of commencement and duration of the chit, the method of deciding the prize winner at each instalment, maximum discount to be foregone, mode and proportion of dividend, foreman’s commission, date, time and place of auction, instalment at which the foreman is entitled to the chit amount, name of the bank, and the security to be furnished by the prized subscriber.
Though every subscriber is expected to sign the Chit Agreement, in practice, subscribers sign a declaration in the application form stating that they have read and understood the terms and conditions of the Chit Agreement. These declarations are detached from the application form, compiled, and filed with the Registrar.
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. same format content change only.
1.1 A good source of finance for all contingencies.
1.2 A convenient way of saving or borrowing to meet special expenses such as marriage, construction, or purchase of a house or flat.
1.3 A reliable source of finance for businessmen.
2.1 Details of groups available and other information regarding the mode of auction and nature of security required are available at the branch.
2.2 The security indicated will normally apply for one chit. If a subscriber holds more than one prized chit in the same branch or in other branches of the Company, the combined future liability will be taken into account for the purpose of determining the required security.
2.3 The subscriber may select a suitable group depending upon their capacity to pay monthly instalments and their ability to provide adequate security, whether immovable or otherwise.
2.4 Subscribers may seek guidance from the branch in all matters related to chits.
2.5 The right of admission to chits is reserved by the management.
3.1 Subscribers must pay the monthly instalments on or before the due date either by cash, cheque, or Demand Draft (D.D.) to participate in the auction. Cheques should be encashed before the date of the auction to be eligible for participation.
3.2 Every month, immediately after the auction (within 7 days), intimation cards containing details of the bid amount in the last auction, monthly instalment payable, any dues payable, date of the next auction, and due date for payment are sent to the subscribers. Non-receipt of the intimation card will not be accepted as an excuse for non-payment or belated payment.
3.3 Failure to remit instalments on time by both prized and non-prized subscribers will result in forfeiture of dividend in addition to interest being charged as detailed in the chit agreement. In the case of non-prized subscribers, default in payment of monthly subscription will disqualify them from participating in the auction.
3.4 Cheques from outstation subscribers drawn on any bank which is a member of the Banker’s Clearing House only will be accepted at par.
3.5 If cheques issued by subscribers are dishonoured, future subscriptions will be accepted only in cash. Penalty charges levied by the bank in respect of such dishonoured cheques will be recovered from the subscriber.
3.6 To facilitate subscribers, monthly instalments are accepted in all branches and service centres in Tamil Nadu, even if the chit does not belong to that particular branch. This facility is provided only as a convenience. The Company will not be responsible if remittance details are not received by the branch where the chit is held before the auction date.
3.7 The facility of paying subscriptions at 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. Any such payment made in another branch will be treated only as “on account” and not towards any particular instalment.
3.8 Subscribers are advised to issue only “Account Payee” cheques in the name of the Company. Issuing blank cheques or self-cheques to collection agents should be strictly avoided.
3.9 In the event of a prized subscriber receiving a notice under Section 33 despite having remitted the up-to-date instalment at another branch, it is the responsibility of the subscriber to produce the receipt to the branch where the chit is held and reconcile the matter.
4.1 Eligibility for prize money is determined by auction. In all auctions commencing from the 2nd instalment, subscribers can bid up to a maximum of 40% only. If more than one subscriber offers identical discount, the prized subscriber will be determined by lot. The bid amount shall be in multiples of Rs. 50. The minimum discount foregone shall not be less than the foreman’s commission for the group.
4.2 The duration of the auction will be 5 minutes. A specific time is assigned for each group on a specific date. If the auction date falls on a holiday or if owing to unforeseen causes the date and time have to be changed, such changes will be notified individually and also displayed in the branches.
4.3 Subscribers can participate either in person or through a duly authorised representative. Written authorisation is mandatory.
4.4 Subscribers can also communicate their offers in writing in a closed cover superscribed as: “Bid offer to be opened at the time of auction only, for Group No……… auction on ……………”
4.5 Telephonic or telegraphic offers are not accepted. Original receipt must be produced at the time of auction if the subscription payment is made in cash on the auction date.
4.6 Requests for offer, tender, or inclusion in lot should be presented only at the branch in which the chit is held.
4.7 If a non-prized subscriber has given his chit under lien to another prized ticket, participation in auction will be allowed only after the liabilities of the prized ticket are fully paid or when alternative acceptable security is offered and the lien is lifted.
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.
6.1 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..
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.
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. SGA Investments Advisory Division will be able to offer you valuable guidance in respect of acceptance of deposits by SGA Group Companies and subscribers can avail their free service without any obligation.
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.
SGA Chits (Srii Ganapathy Arawind Chit Funds Pvt Ltd) is a trusted chit fund company providing transparent, secure, and reliable financial solutions in Pollachi.
Srii Ganapathy Arawind Chit Funds (P) Ltd,
34, Nehru Street, Mahalingapuram,
Pollachi, Tamil Nadu – 642002
+91 98651 81334
+91 99760 51318