CONCEPT OF CHITS
Concept of Chits
Chits is the unique concept in India and considered as one of the indigenous savings option in the family, for more than a century.
Monthly Schemes do offer the way for Investors’ to invest in Assets like Car, House, etc., and for Borrowers’ to save short term to clear partly or fully the long term Loans. These are all the factors adding values to this concept. Only product, in the financial Industry, that provides multiple benefits to Investor and Borrower as well.
There are various types of schemes to suit the needs of different class of people, like Individuals to HNIs
Chit values are ranging from Rs.5.00 Lacs to Rs.1.00 Crore and spreading 40, 50 and 60 months.
It is suggested that Subscribers should ascertain the purpose of joining a chit scheme and select it in tune with their financial needs. Further, the monthly allocation of surplus amount and duration of the Chit are playing vital role in selecting the Chit schemes. Normally, the benefits in the long duration chits are comparatively better than the short duration Chits. .
Benefits of Chits
The Chit Schemes are customized with the needs of Investor expecting good return on investment for their savings and for Borrower, sourcing the Fund at low cost to meet their Business contingencies.
The well planned Chit Schemes, selected by the Investors may be used for the Marriage and Education of their children and also to invest in Assets like House/Flat, Car, Two wheeler, Jewel and Consumer durables, etc.,.
The yield on investment is comparatively more than Bank FD and RD Schemes. The reason is, Businessmen are also joining the Chit Groups, participate in the auction and bid for high discount amount for business purpose. Higher the discount amount gives high Dividend amount. Thus, it gives good return to the Investor Class.
Also, the Cost of Funds, mobilized through Chit Schemes, is low compared with the Cost of Borrowings from any Financial Institution
Hazzle free Documentation procedure to release the prize money amount with flexible requirement of Security / Surety to cover the liability in the Prized Chit(s)
Why “Shriram Chits”?
Undoubtedly, it is the pride of “Shriram” to claim that the concept of Chit was made popular in India. It is also proved over the period of time that the Chit schemes can be organized in a big way and made useful even for the Business segments.
Apart from the above, there are various reasons exist to say why people select “Shriram” to part their savings. They are as follows;
Transparency in operating system
All our Chit Schemes are Registered with the Registrar of Chits and get permission before Commencement of every Chit Groups. All our operating procedures are explained to the Subscribers while enrolling the Chit scheme.
Filing of all Returns is done every month with the concerned Chit Authority. Our records are always subject to inspection by the concerned Authority. So transparency in Record keeping is maintained.
We have Branches almost in the Subscribers’ home town itself. It is advantageous, on either way, for easy access to both Subscriber and the Company to get and to provide better Service respectively.
Long term association with People
Shriram Chits is a “Household” name in every family. We are providing financial assistance to the Customers for more than four decades. It alone creates a big confidence in the public to invest their hard earned money with “Shriram”.
We have reached many satisfied Customers by fulfilling their periodical financial requirements in the times of their need. Thus, we could build an emotional relationship with every Customer
In the minds of Public, Chits means, it is always “Shriram” only.
Be Safe and Secure
The money invested in Shriram Chits has been proved to be safe and secure all the time. Having understood the value of money, it adopts all sorts of precautionary measures right from enrolling a Subscriber in Chit and till disbursing the money to them. Further, the strong force of collection mechanism is one of the big backbone of the Company to monitor the investors money.
Other Salient Features
Monthly SMS to Subscribers Registered Mobile Number indicating the Last Bid amount, Share of Subscription and Dividend, etc.,
Digital payment system
Instant message confirmation on Registered Mobile for Subscription payment
Doorstep collection option by Company Authorised Employees
Who can Join Chits?
Private and Public Limited Companies
Become a Subscriber
The Customers’ can select their nearest Branch and the Scheme, which is suitable for their need.
The Chits are always common in all the Branches except the High Value Groups viz., above Rs.25.00 lacs. Such High Value Chits are floated only in select Branches for Administrative reasons Collect the prescribed Chit Enrollment Form either from the nearest Branch or from Authorised Agents.
The filled Chit Application has to be submitted along with Chit Agreement duly signed by the Subscriber to the Branch, chosen by the Subscriber, by paying the 1st installment amount with Admission Fees either by Cash or Cheque for allotting the preferred Chit Scheme.
On completion of the above said formalities, the Customer will be allotted with a Group and Ticket Number for all reference purpose in future
Mode of Payment
Subscription amount can be remitted at any of the Branches by Cash or Cheque Thro’ Company Authorised Recovery Executives By Digital payment option, Subscriber can download “Shriram Apps” on their registered mobile and remit their subscription amount instantly. Further monthly auto debit System from their Bank Account thro’ NACH concept is also available, which facilitates the Subscriber to pay the amount on their preferred date.
The first Public Auction of the Chit will be intimated thro’ a Welcome Letter to each and every Subscriber in the Group. It carries all information about the Chit Value, Group No, Ticket No, Date of Auction and Time with due date for payment of Subscription amount, etc., Auction is conducted for 5 minutes only There is maximum ceiling of 40% in bidding on CV Subscriber, who is willing to Bid the Chit, can participate in the Auction…
In Person or Giving bid offer in advance or Authorizing representative with authorization letter
Types of Auctions
Subscribers are physically present in the Auction Hall. Participants pronounce orally their discount amount that they want to forego. Among the participants, the successful Bidder is confirmed to the highest discount amount at the end of 5th minute of auction.
If the Bid offer is submitted by more than one subscriber for the same Discount Amount, then the Successful Bidder will be confirmed by “Lot” only
Claim of Prize money
At the end of auction, proposal form will be given to the Prized Bidder requiring the type of surety and security to be offered by him/her to claim the prize money amount. The type of Surety and security to be offered by the Bidder will be explained by the auctioner immediately. The Bidder has to submit the Proposal Form within seven days from the date of auction for approval purpose. If the Foreman is satisfied with the surety / security details given in the proposal form, then he/she has to execute the documents and also complete other formalities, if required by the Foreman.
Once all formalities are completed, the prize money amount will be paid on the 30th day from the auction
Terminology used in Chit Business
Chit Value – The Gross amount of monthly subscriptions payable by the Individual Subscriber during the Chit Period
Group & Ticket No. – Pooling of Subscribers under an identified Reference Number with individual Serial Numbers allotted to each one of them
Subscription – The amount payable by a Subscriber every month after completion of the Auction. It may vary from month to month depending upon the amount discounted by the Bidder in the auction.
Tenure – It is nothing but the duration of the Group i.e.,Number of Months
Installment – Series of monthly subscription amount payable by the Subscriber every month
Auction – The method of proceeding to decide the Successful Subscriber among the participated Bidders
Re-auction – If the Prized bidder is not able to provide the sufficient surety or security and failed to claim his/her prize money amount within 60 days from the date of Auction, the said auction will be cancelled by the Foreman, as per the agreement, and conduct another auction called “Re-auction” to confirm the new bidder.
Discount – In a particular Auction proceeding, the amount forgone by the Bidder from his Chit Value
Prize Money Amount – The Gross Value of Amount receivable by the Prized Bidder after deducting the amount foregone from the Chit Value
Foreman – The Person, who conducts the Chits, as the Chit Agreement, is called “Foreman”.
Foreman Commission – Foreman is entitled for 5% on Chit Value towards Charges for organizing and conducting Chits every month.
Dividend – The amount, which is distributed equally among the Subscribers’ in the Group, after deducting the Foreman Commission from the amount discounted by the prized bidder in the auction, is called “Dividend”.
Interest – The Subscribers have to pay their monthly subscription amount on or before the due date every month to facilitate the release of the prize money amount to the bidder on date. Failing which, charges for the delayed payment, Interest, will be collected, as per agreement, from them.