Technical Terms Used In Chit Business

1. Subscriber:

The person who agree to subscribe to the chit group and to contribute the prescribed contributions for the full period of the chit group.

2. Prized Subscriber:

subscriber who has received the prized amount.

3. Non prized Subscriber:

A subscriber who is yet to bid for prized amount.

4. Foreman:

A person or Company responsible for formation of a Chit group, Collection of subscriptions, conducting chit auction and disbursing the amount to the successful bidder. For these duties, he is paid a fee, which is generally 5% of the chit amount.

5. Registrar:

The sum total of the subscriptions payable by all subscribes for any installment of a chit.

6. Chit Amount:

Yes, one can have a chit in joint name with any family member or a friend. The prize amount in such case is given in the manner in the ratio of subscription to the subscribers individually or in any one name as may be given in writing to the Company.

7. Chit Group:

Members who have subscribed to a particular value of chit & tenure.

8. Ticket:

It denotes a share of subscriber in chit series of a particular chit denomination and is identified with specific number assigned by the foreman.

9. Ticket Number:

The serial number of the subscriber in the chit. Account no.

10. Discount of Bid:

The sum of money which a prized subscriber is required to forego, under the terms of the chit agreement and which is set apart to meet the running expenses of the chit and for distribution among the subscribers of the chit.

11. Auction/ Draw:

The manner specified in the chit agreement for the purpose of ascertaining the prized subscriber every month.

12. Prized Amount:

The difference between the chit amount and the discount.

13.Dividend:

The share of the subscriber in the amount of discount available under the chit agreement for distribution among the subscribers.

14. Guarantor:

Guarantor fills out to become responsible for another person's debt if the other person fails to pay the debt or cannot perform the obligations under a contract.

15. Future liability:

The amount which the subscriber owes to the foreman post prize amount disbursement.

16. Chit Transfer / Substitution:

The chit can be transferred/substituted in case of non-continuance .T & C apply.

17. Chit Lien:

Is an encumbrance of accrued amount in a non- prized chit offered to a prized chit.

18. Defaulter:

A subscriber who has defaulted in the payment of subscriptions due, in accordance with the terms of the chit agreement.