FREQUENTLY ASKED QUESTIONS
01. WHAT IS A CHIT FUND?
Chit Fund is an age-old traditional way of funding ( by periodic turn ) a member of a group of like-minded individuals who agree to meet for a predetermined period and frequency to save and avail the funds together – a form of combined peer-to-peer pooling and peer to-peer financing, known internationally as ROSCA ( Rotating Savings & Credit Association ) model.
02. HOW IS A CHIT FUND BENEFICIAL?
A person who joins a chit fund is compelled to set aside a tiny portion of his income to cover investments or other anticipated or unforeseen expenses. Chit is a hybrid product covering both investment and a loan. In an emergency, borrowing money from the chit fund is significantly simpler, quicker, and less expensive compared to loans from Banks. The return, a subscriber receives, in the form of chit dividends is significantly bigger if they decide to save until the very end. There is no TDS in chits.
03. ARE THERE ANY CHARGES FOR JOINING A CHIT GROUP?
Yes. Rs.500/- will be charged during customer onboarding and it is a one-time non- refundable fee. The on boarding fee covers expenses in connection with KYC and address verification.
04. WHAT HAPPENS WHEN SOMEONE DEFAULTS A CHIT?
If a prized subscriber defaults an installment, the dividend eligible for the particular installment shall be forfeited and he shall be charged @12% pa on the default amount for the default period. In addition, the defaulter has to face legal action.
If a non-prized subscriber defaults, he will be charged @ 12%pa on the installment amount for the default period. If it is more than one installment, the ticket will be substituted by Foreman or a new subscriber. If it is substituted by a new subscriber the aggregate balance in the account of the defaulter shall be refunded after deducting an interest of 12%p a for the period of default. If it is substituted by Foreman, the defaulter shall get the balance in his account only on termination of the chit after deducting foreman commission as applicable.
05. HOW DOES A CHIT OPERATE?
Chit is a mutually beneficial scheme where in a group of people contribute towards the chit value and one member from the group is given the prize amount and the dividends are distributed equally among all members. For example, if we consider a chit value of Rs.500000/- with 50 members in the group, each member has to contribute Rs.10000/- where by ( 50 X 10000 ) Rs.500000/- is collected.
Auction is conducted periodically in which the needy members participate and the person who discounts the maximum is declared as the prized subscriber. If there are more than one participant for maximum discount, the Successful Bidder will be determined by way of lottery. In traditional set up ( where there is no automated process ) the tokens bearing the numbers allotted to the needy participants are put into a box and one token is drawn by any of the participants present in the auction and thus, the participant whose number is mentioned on the drawn token will be declared as the successful bidder. In an automated environment, the above process is captured digitally in the system ( as in the case of Suhrudha Kuries ).
30% is the maximum bid allowed, which means a person foregoes Rs.150000/- and the balance Rs.350000/- is paid to the prized subscribers. Out of 30%, discount @5% goes to the company( foreman ) as commission for conducting the chit and balance of the discount amount is distributed equally amongst all members of the group. That is, 25 % is distributed equally among all the 50 members and each member gets Rs 2500/- as dividend. Thus, each member has to contribute ( Rs.10000 – Rs.2500 ) = Rs.7500/- only.
06. WHY SHOULD I PREFER SUHRUDHA KURIES?
At Suhrudha Kuries, we take pride in being one of the most trusted names in the kuri industry, with over 27 years of reliability and excellence. As an MSME – registered organization, we operate strictly under government approval, offering only Government Approved Chits/Kuris to ensure complete transparency and security for our members.
07. WHAT ARE THE VARIOUS CHIT GROUPS AVAILABLE IN SUHRUDHA KURIES?
Suhrudha Kuries has a wide range of chit groups which covers people from all walks of life – Individuals, Employees, Professionals, Agriculturists, Land Lords, Proprietary/Partnership firms, Companies, Corporate offices, Organizations, etc. It has a wide range of chit values starting from ₹1,00,000/- to a maximum range of ₹40,00,000/-.
08. WHAT ARE THE DURATION OF THESE CHITS?
- Suhrudha Kuries has a wide range of monthly chits with duration starting from 20 months to 60 months.
- Suhrudha Kuries offers weekly chits as well, the target population being small traders/individuals with daily collection facility digitally.
- Suhrudha Kuries offers Institutional Chits to employees of one single company/organization for various durations.
- uhrudha Kuries offers fixed dividend weekly chits to small traders/individuals.
09. WHAT ARE THE SECURITIES ACCEPTED FOR AVAILING PRIZE MONEY IN AN AUCTIONED CHIT?
While availing the prize money, the subscriber may offer any of the following securities to the satisfaction of Suhrudha Kuries :
- Gold ( 18 carat and above ) : The future liability should be below 75% of the market value of gold
- Non-Prized Chit ( NPC ) : The future liability should be below 95% of balance in the NPC
- LIC Policy : The future liability should be below 95% of the surrender value of the Policy ( Market Linked Policies are not acceptable )
- Unencumbered Land & Building : The future liability should be below 50% of the market value of the asset
- Fixed Deposit of Scheduled Commercial Banks : The future liability shall be below 95% of the face value of the bank fixed deposit
- Bonds/Debentures of Group Firms : The future liability shall be below 95% of the face value of the bond/debenture
- Bank Guarantee from Scheduled Commercial Bank : The future liability shall be below 95% of the guaranteed amount
- Salary Certificate & Personal Guarantee : Authenticated salary certificate of employees of state govt or scheduled commercial banks, public sector companies, govt schools, Acknowledged ITR of professionals viz doctors, engineers and architects. Monthly income should cover 3 times the instalment amount.
Chit Security Receipt : The auction winner may place the prize amount with Suhrudha Kuries as security for the future liability to earn 10% return on the security. The security shall be released and returned to the subscriber on termination of the chit.
