Chit is a mutually beneficial scheme where group of people contribute towards the chit value and one member from the group is given the prize amount and the dividends are distributed to all the other members. For example if we consider a chit value of Rs.1,00,000 with 20 members in the group, each member has to contribute Rs.5,000 where by (20 X 5,000) Rs.1,00,000 is collected.

Members participate in the auction 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. Where in, the tokens bearing the numbers allotted to the members is put into a box and one token is drawn by any of the member present in the auction and thus, the member whose number is mentioned on the drawn token will be declared as the successful Bidder.

25 % is the maximum bid allowed, which means a person foregoes Rs.25,000/- and the balance Rs.75,000/- is paid to the prized subscribers. In addition, 5 % goes to the company towards Foreman’s 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 to all the members by which next month they have to contribute (Rs.5,000 – 1,000) = Rs.4,000 only and Rs.1,000/- is declared as dividend for that month.

When there are no maximum bidders, then the members will bid in the open auction that is conducted within 15 minutes for each group and the person who bids the highest is declared as successful Bidder. For example: Suppose, in the 10th month the successful bidder was declared at 20 % then all the members of the group will get a dividend of Rs.800 each i.e (Rs.16,000 divided among 20 members) and each members has to pay 4,400 towards installment.

Therefore the members have to pay the installment amount less the dividend, the dividends earned work out to be the interest on the installment payments made by the member. Successful bidder is supposed to give the required sureties depending on the future liability of the chit. Only non-prized subscribers whose payments are up to date can participate in the auctions.

Every month there is a successful bidder who gets his prized amount on submission of required Guarantors. The prized subscriber has to continue to pay the monthly installments till the termination of the chit.

Those members who do not want to draw the chit can contribute to the chit and after the 20th month if there are no bidders for the auction, the auction is decided by lot among the non-prized subscribers and the successful Bidder is paid the prize amount. They either have options to submit sureties or prefer future liability deducted upon which balance amount is paid from the prized amount. The dividend accrued for the 20 months are the returns on investment for the monthly deposit made to their accounts.

Chit Fund has flexibility to borrow or save. By paying one-month installment amount, a person can get to borrow from the chit value, by offering a discount not exceeding the maximum limit ascertained in the chit agreement.

In a chit value of Rs.1,00,000/- for a period of 20 months, first the subscriber can get an amount of 75,000 by paying only Rs.5,000/- and remaining installments he pays over a period of 20 months. The rate of borrowing is much cheaper than several other financial schemes.

The dividend got by the non-prized subscriber who is a saving member is comparatively higher than the interest made by way of recurring deposit scheme.

• Satheesh Balaji Chit Funds is managed by qualified and well-experienced veterans in the field,
• High quality of members / subscribers in all the Schemes – background, financial capability, guarantors
• Bondage between the Company and the Members / Subscribers – Admission thru reference, repetitions, multiple tickets in the Group
• 100 % recovery is assured,
• Timely payments upon completing documentation,
• Daily / weekly / bi-monthly / monthly payments at convenience collected from the place of their choice

Any member in a registered chit fund company is very much secured than a member in a non-registered company.

A Registered Chit fund company makes a security deposit equal to 100% of chit value in a Schedule Bank as a Fixed Deposit, which is pledged in favour of Registrar of Chits to the extent of its tenor.

The dividend which a member earns every month is the amount saved. Even if a member takes the chit at the last month, the total dividends earned by him will be more than the interest rate of the Bank.

The dividends earned in a chit are not taxable. If one wants to claim the bid as loss, then these dividends have to be shown as revenue / income in the assessment. Hence the entire dividend earned in a chit is not taxable if one does not claim the bid amount as loss.

By joining in a Chit, a person is forced to save a part of his income to his planned or unplanned investments or expenditure in future. Borrowing from a Chit Fund is easier than borrowing from a Bank. The chit loss is lower than the market rate of interest. If a person likes to save the return he gets in a chit by way of dividend is high than the interest from banks on recurring deposits.

Satheesh Balaji Chit Funds has wide range of chit groups which suits all kinds of people for Example: Individual, Employee, Professionals, Agriculturists, Land Lords, Proprietors, Partnership firms, Companies, Corporate offices, Organization etc., it has a wide range of Chit values starting from Rs.1,00,000 to a maximum range of Rs.1,00,00,000 under 20 / 25 / 30 / 40 / 50 months.

Satheesh Balaji Chit Funds has various ranges of duration of chit groups. They are 50 months (Long term), 40 months (Long term), 30 months (Long Term), 25 months (Medium Term) and 20 months (Short term) with 50, 40, 30, 25 and 20 members respectively forming the group.

A person can take up to 3 chits in a group.

Auctions are conducted in the branches where in the foreman declares the successful bidder. All non-prized subscribers who have paid their installments up to date are eligible to participate in the auctions. In case the payment is made by cheque, the cheque should have been realized one day before the auction date. For every group the auction time is 15 minutes on a specified date and time.

During the first few months there will be more number of participants willing to bid at the maximum discount. This maximum discount is predetermined for each group and should not go beyond 40% of chit value.

The maximum bid limit varies between 25 % to 40 % depending on the duration of the chit. In addition, 5 % of the chit value is the company's commission and the balance percentage is distributed as dividends equally among the members in the Group. The member pays the next installment minus the dividend and the dividend amount is credited to his account.

When there are more members for maximum discount their tokens are put in a box and one token is picked by the way of lottery. The member who holds the ticket that is marked on the picked up token is declared as successful bidder who has to submit the required sureties depending on the future liability.

When there are no maximum bid offers in the auction members can participate in open bidding during the auction time. When there is no maximum discount bidding members are supposed to participate in open bidding during auction time, which starts minimum 5% of chit value or any bid offer that has been given by a member prior to auction time. Members are supposed to bid in multiple of 100 from the minimum bid offer amount and the person who quotes the highest bid amount on the completion of 5th minute shall be declared the successful bidder by the foremen.

If there are no offers above the bid offer the member who has given the highest amount as bid offer is declared as successful bidder. Bid offer is to be given to the office 24 hours prior to the day of auction in which one can mention the maximum bid amount that is acceptable to them. If a member is unable to participate in the auction the member can authorize some other person whose signatures have to be authenticated by the member. Generally member authorizes the family member or Development officer's and Agents as proxies to participate in the auctions.

A member / subscriber can make payments either by cash, cheques, demand drafts, wire-transfer (NEFT / RTGS / internet banking), ECS and card-payments (debit card / credit card)

Any member who has made the payments up to date can participate in auction. If paid by cheque, it should have been realized before the auction date. A defaulter whose payment is not up to date before auction is not eligible to participate in the auction before the auction date.

In every chit group some members who are in need of money will be participating in the auction for bidding. The purpose of bidding is to declare the successful bidder who gives the highest bid amount (Not exceeding maximum limit) within specified auction time. i.e 15 minutes.

A member can give sureties depending on the liability of the chit. Following are the sureties generally submitted by the members:

• Personal surety: Any salaried person working in State / Central Government / Public Limited Companies / Banks and other Reputed Companies will be taken as surety.
• Pledge: Deposits with the company in chits or otherwise, net paid amount of which, after deducting foreman's commission should be less than 1/3rd of successful bidder's liability to the company.
• Bank Guarantee: Guarantee given by the Schedule Bank in a schedule format can be submitted as surety.
• Income Tax Assessor: Any person having IT Assessment for the past three years having business, profession etc., will be taken as sureties.
• Property Pledge: Deposit of tittle deeds of urban property can be submitted as surety. Third party property can also be given as surety.

Normally a minimum of three sureties or guarantors other than family members are insisted upon. The basic salary or taxable income of all such sureties or guarantors should not be less than 20% of the chit’s future liability.

Once a member is declared successful bidder it is his responsibility to provide satisfactory sureties / guarantors based on the future liability as specified in the byelaws. On receipt of the surety form, the liability of the members and the guarantors are verified.

Once the documentation and verification is complete, the document is forwarded to Registered Office, which scrutinizes the document in all aspects, and if the document is found to be satisfactory payment is released to the Subscriber.

Members who make regular payments and those who submit the required documents immediately will have the greatest opportunity to receive the fastest payment.