abhishreshthaa
Abhijeet S
MEANING OF A CHIT FUND COMPANY
Chit Fund Company means a company engaged in the business of managing, conducting or supervising as a foreman or the agent or any transaction or arrangement by which it enters into an agreement with a number of subscribers that every one of them shall subscribe to a certain sum of installments for a definite period and that each subscriber, in his turn, as determined by a lot or by auction or by tender or in such be entitled to a prized amount, and includes companies whose principal business is accepting fixed deposits from, and lending money to members.
INTRODUCTION AND HISTORY OF CHIT FUND COMPANIES
The chit fund is an indigenous scheme doing financial services to the public since the year 1120 with bidding system (discounting of the chit amount). Once, it was called “draw chit” (by lot). This method did not in due course attract the subscribers because it could not serve the very purpose of the chit in view of ‘By Lot’ which helped serve the needless subscribers only.
Subsequently, the promoters and the subscribers came together resolved to provide a proposal to put the chit amount before the subscribers present to auction and who bids/prizes the chit discounting without any ceiling of discount for their urgent needs, declared as prized subscribers.
Auctioning the chit was an attractive term with mass appreciation of the people till now.
In the early days of 1970-80, some chit funds, by sporadic failures due to non-collection of arrears from the defaulters of the chit group, collapsed by some other reasons.
But the government understood that the higher discount in chits was the failure of the chit funds and enacted a law which provides the clause of ceiling of 30% in discount in the year 1982.
Providing the ceiling of discount may be at par to the Lottery Chits, but no auction or conduction chit which is contrary to true sense and spirit of the words Auction Chits / Conventional Chits / Business Chits.
Prizing the chit with higher discount is an open method being adopted so far to meet the urgent needs of a needy subscribers and the prize amount is supposed as spent towards their requirements which is not a loss but it may be treated as expenses towards redemption of pledged property, and to repair the house or to complete the incomplete house, perform marriage to sons and daughters, higher studies and for seeking jobs to their dependants with the prize amount which is an asset and not a loss.
Chit Fund Company means a company engaged in the business of managing, conducting or supervising as a foreman or the agent or any transaction or arrangement by which it enters into an agreement with a number of subscribers that every one of them shall subscribe to a certain sum of installments for a definite period and that each subscriber, in his turn, as determined by a lot or by auction or by tender or in such be entitled to a prized amount, and includes companies whose principal business is accepting fixed deposits from, and lending money to members.
INTRODUCTION AND HISTORY OF CHIT FUND COMPANIES
The chit fund is an indigenous scheme doing financial services to the public since the year 1120 with bidding system (discounting of the chit amount). Once, it was called “draw chit” (by lot). This method did not in due course attract the subscribers because it could not serve the very purpose of the chit in view of ‘By Lot’ which helped serve the needless subscribers only.
Subsequently, the promoters and the subscribers came together resolved to provide a proposal to put the chit amount before the subscribers present to auction and who bids/prizes the chit discounting without any ceiling of discount for their urgent needs, declared as prized subscribers.
Auctioning the chit was an attractive term with mass appreciation of the people till now.
In the early days of 1970-80, some chit funds, by sporadic failures due to non-collection of arrears from the defaulters of the chit group, collapsed by some other reasons.
But the government understood that the higher discount in chits was the failure of the chit funds and enacted a law which provides the clause of ceiling of 30% in discount in the year 1982.
Providing the ceiling of discount may be at par to the Lottery Chits, but no auction or conduction chit which is contrary to true sense and spirit of the words Auction Chits / Conventional Chits / Business Chits.
Prizing the chit with higher discount is an open method being adopted so far to meet the urgent needs of a needy subscribers and the prize amount is supposed as spent towards their requirements which is not a loss but it may be treated as expenses towards redemption of pledged property, and to repair the house or to complete the incomplete house, perform marriage to sons and daughters, higher studies and for seeking jobs to their dependants with the prize amount which is an asset and not a loss.