|
1.
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 to all the other members. For Example if we
consider a chit value of Rs.100000/- with 50 members in the
group each member has to contribute Rs.2000/- where by (50 X
2000) Rs.100000/- is collected.
The auction is conducted in which the 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. 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 mention on
the drawn token will be declared as the Successful Bidder.
45% is the maximum bid allowed, which means a person foregoes
Rs.45000/- and the balance Rs.55000/- is paid to the prized
subscribers. Out of 45% discount 5% goes to the company
towards company's commission for conducting the chit and
balance of the discount amount is distributed equally amongst
all members of the group. That is 40 % is distributed to all
the members by which next month they have to contribute
(Rs.2000/- - Rs.800/-) = Rs.1200/- only and Rs.800/- 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 5 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 40%, then all members of the group will
get a dividend of Rs.700/-each i.e. (Rs35000/-divided among 50
members) and each member has to pay Rs.1300/- towards
Installment.
Therefore the members have to pay the installment amount less
the dividend, the dividends earned workout 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 company is
prepared to disburse the prized amount within 72 hours
provided the sureties are satisfactory and documentation is
verified and approved. The prized
subscriber has to continue to pay the monthly installments
till the termination of the chit.
Those members who do not want to borrow funds contribute to
the chit and after the 40th month if there are no bidders for
the auction, lot declares one of the remaining members as
Successful Bidder and the prized amount is paid to them. 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 50 months are the
returns on investment for the monthly deposit made to their
accounts.
 |
2.
What are the benefits of a chit fund?
Chit fund is a unique financial concept, which 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.100000/- for a period of 50 months,
first the subscriber can get an amount of 55000/-by paying
only Rs.2000/- and remaining installments he pays over a
period of 50 months. The rate of borrowing is much cheaper
than several other financial schemes.
The non prized
subscriber who is a saving member upto the last installments
gets dividend which
is comparatively higher than the interest that are accrued by
way of Recurring Deposit Schemes.
The purpose of drawing the prized
amount need not be disclosed. It can be used for any need by
the member for Example: House construction, Marriage,
Education, Expansion of business, buy a Computer or any other
purpose at his discretion.
|
3.
Why should I prefer margadarsi to other chit fund companies
?
Sri
Ramoji Rao, the founder of chit concept in Andhra Pradesh,
started Margadarsi Chit fund Limited in the year 1962. He has
built in a system in administering this financial concept.
What used to be a house wives part time activity has been led
to a dynamic activity with professional integrity.
Margadarsi has established strong experience during these 42
years since its inception that enables the service to be
rendered meticulously and it has become a household name in
the state of Andhra Pradesh.
We have a subscriber base of 3,40,000 members who
repose their trust in this gigantic company. They have all
been satisfied customers who are mostly repeating members and
many of them have continuously maintaining accounts with the
company since the past 30 to 35 years. This speaks of their
satisfaction in the service rendered by the company.
Margadarsi has done 2250 crores of qualitative business
turnover which comprises members from different walks of life
like Doctors, Chartered Accounts, Advocates, Government
employees and business people.
Margadarsi is highly conscious about the quality of membership
by screening every enrollment form that is received and only
if the financial capacity seems to be satisfactory, we approve
the enrollment.
We have an excellent track record of 99% recovery, which is a
key to any successful financial company. Good recovery is
possible only with qualitative members.
Most importantly margadarsi has earned great reputation for
best and timely payments of prize money. We are eager to make
the payment to the members since a satisfied member gives us
more business.
We are very keen in proper sureties/Guarantors for the future liability of a
prize subscriber
since we have to protect the interest of the saving members
(i.e. Non Prized Subscribers).
Subject to a perfect documentation and verification we are
making the prized payment in 72 hours.
|
|
4. What are the
various chit groups available in Margadarsi?
Mardadarsi chit fund is having a vide range of chit groups
available which suits all walks of people for Example:
Individual, Employee, Professionals, Agriculturists, Land
Lords, Proprietors, Partnership firms, companies, corporate
offices, Organization etc., It has a vide range of Chit values
starting from Rs.25,000/- to a maximum range of
Rs.25,00,000/-.
5.
What is the duration of these chits?
Margadarsi is having various range of chit duration. They are
50 months (Long Term), 40 months (Forty Term), 30 months
(Thirty Term), and 25 months (Short Term), groups with
50,40,30 and 25 members respectively forming the group.
6.
How many chits can I take in a chit group?
A person cannot take more than 2 (Two) chits in a group that
too he should have paying capacity for the same.
7. What are the modes
of payment?
Member can make payments either by cash, Demand Draft or
cheques. Third party cheques are not acceptable. Issued
cheques have to be realized before the auction date if the
member wants to participate in auction.
8.What is the security for my money?
A Registered Chit Fund Company makes a Security deposit equal
to 50% of chit value in a Schedule Bank as FDR, which is
pledged in favor of registrar of chits. Therefore, a member in
a registered Chit Fund Company is very much secured than a
member in a non-registered company.
9.How
are Auctions conducted?
Auctions are conducted in the branches where in the foremen declares
the successful bidder. All non-prized subscribers who have
paid their Installments up to date are eligible to participate
in the auctions. For every group the auction time is 5 minutes
on a specified date and time. It is upto the members to be
present in the auction hall 10 minutes before auction time as
verification has to be done by branch for signatures of
members and identification of proxies.
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 45 % of Chit value.
When there are more members for maximum discount their tokens
are put in a box and one token is picked by 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.
Generally in the long-term groups auctions go for maximum
discount between 7th months to even 25th month depending on
chit value. When there are no maximum discount bidding members
are supposed to participate in open bidding during auction
time, which starts with a 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 multiples of Rs.10/- 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 has 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.
|
10. When can I
participate in the auction?
A member can participate in auction right from the first
auction itself, only if he or she has made the payments up to
date. If paid by cheque, it should be realized before the
auction date. A defaulter whose payment is not upto date
before auction is not eligible to participate in the auction.
11.
What is the purpose of bidding?
In
every chit group some members will be in need of money. So all
the 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 the specified auction time
i.e. 5 minutes.
12.
What is the
benefit from saving in chit?
There will be a compulsory saving which will earn dividends
every month. Even if you take at the last month, the total
dividends earned will be more than the bank interest rate.
13.
What are
the Income Tax benefits from saving or borrowing?
The dividends earned in a chit are not taxable. If you want to
claim the bid as loss then these dividends has to be shown as
revenue income in the assessment. Hence the entire dividend
earned in a chit is not taxable if you don't claim the bid
amount as loss.
14.
What are
the sureties to be submitted?
A
member can give sureties depending on the future liability of
the chit. Following are the sureties generally submitted by
the members.
1.Personal Surety: Any salaried person working in
State/Central Govt./ Public Limited Companies/Banks and other
Reputed Companies will be taken as surety.
2.FD Pledge: If a member is having any deposit with Margadarsi
Financiers, he can pledge the deposit certificate as surety.
Member can also make the deposit from the prize money, which
will be accepted as surety.
3.Bank Guarantee: Guarantee given by the Bank in a schedule
format can be submitted as surety.
4.Income Tax Assessor: Any person having I T Assessment for
the past three years having business, profession etc will be
taken as sureties.
5.Property Pledge: Deposit of title deeds of urban property
can be submitted as surety. Third party property can also be
given as surety.
15.
How soon can I
expect the payment once I bid the chit?
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 Branch forwards it to Corporate
Office for Guarantor search. The liability of the member and
guarantors are verified and then if the guarantors are
acceptable it is sent back to the Branch for Documentation.
The Branch has to prepare the document that mainly includes
the guarantor bond and pro-note apart from the other
requirements depending on the kind of sureties submitted.
Once the documentation and verification is complete, the
document is forwarded to CO, which scrutinizes the document in
all aspects, and if the document is found to be satisfactory
payment is released with in 2 days.
In most of the cases the entire transactions are completed
within 10 days very much depending on the kind of sureties and
the document produced by the member. Members who make regular
payments and those who submit the required documents
immediately will have the greatest opportunity to receive the
fastest payment.
|
|
|