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How safe is my money with Kapil Chit Funds?

Kapil Chits has a very distinguished reputation of over 4 decades in the chit fund industry. Since inception, the company has not defaulted on any of its subscribers’ money and its reputation speaks for itself. Even in stray cases of delayed payments, the subscribers were compensated with interest payments for such delay.

Why should I join Kapil Chit Funds?

Kapil Chits is a professionally managed company in the service of its subscribers for decades. It has been in this business since 1981. It is backed by a well diversified group – the Kapil Group, which has interests in Real Estate, Media, Information Technology, Construction, Agriculture, Horticulture, Dairy, Drone Manufacturing and Services, Solar Energy, Commercial Office Spaces, Property Management, Ayurvedic Hospital, Hospitality etc. The Group is also socially responsible. It supports a non-profit cancer hospital, orphanage for 300 children, and provides scholarships to deserving students from the underprivileged sections of society. We also facilitate collection of the monthly installments from your doorstep besides online collections.

How is a chit fund a better saving option?
By joining a chit fund, a person is encouraged to save a small part of his income to meet his financial goals. In case of contingency, borrowing from the chit fund is much easier, faster, and cheaper. Chit Funds are also a low-risk savings option and allow their members/subscribers to earn better returns through dividends as compared to traditional savings instruments.
Who is a prized subscriber?

Every month, subscribers participate in chit auction. During the auction, they bid for a discounted amount from the total chit-fund value. The subscriber who bids for the maximum permissible percentage of discount on the chit-fund value wins the discounted chit value as “prize money” and is called a “prized subscriber”.

Who is a non-prized subscriber?

Non-prized subscribers are those who have not yet won any prize money through auctions.

What are the benefits of joining a chit fund scheme?

By investing in chit funds, you can build great savings as compared to your savings in a bank. Chit Fund investment encourages people to set aside a small part of their monthly income for long-term wealth creation and allows them to fulfill their dreams and life goals with a significant finance pool, which would have been spent otherwise.

Additionally, subscribers can also raise money for their short-term needs with flexible, interest-free borrowings by participating in monthly auctions and winning prize money.

A subscriber is also entitled to a rebate on prompt payments of monthly chit installments.

What is an auction?
Auction is a procedure for the identification of the non-prized subscriber who wants to take a chit amount at the highest permissible discount. All non-prized subscribers who have paid their installments up to date are allowed to participate in the auction for bidding for the highest auction discount. The bids must be made within a period of five minutes allowed for each auction.
When can a subscriber participate in an auction?
A subscriber becomes eligible to participate in chit auctions from the second month of joining a chit group. Before bidding in an auction, a subscriber must also have paid all his monthly chit installments.
What is an auction discount?

The difference between the chit value and the prize money won by the successful bidder in a chit auction is known as an auction discount.

What is chit dividend?

From the discount (difference between chit value and prize money), 5% or 7% of the chit/pot value is deducted as the foreman’s commission. The balance amount after this deduction of foreman’s commission is distributed equally among all subscribers as chit dividend.

Does the company insist on sureties or guarantors for payment of the prize money to the prized subscriber?
Yes, to safeguard the interests of all non-prized subscribers each month, the company insists on  sureties or guarantors to ensure time-bound repayment of the borrowed money (prize money) and payment of the subsequent monthly chit installments from the prized subscribers.
What action is taken against defaulting subscribers?
Interest is collected from subscribers who delay their monthly chit payments. In instances where a non-prized subscriber defaults for a continuous period of 3 months, such subscriber will be removed from the group. In instances where a prized subscriber defaults for a continuous period of 3 months, a certain percentage of interest will be collected from them and dividends also will not be paid to them. Legal action will be initiated against such defaulting prized subscribers and their guarantors in court of law for recovery of all dues.
Can I withdraw from a chit group after becoming its member?
When a subscriber withdraws from a chit group, the foreman must substitute him/her. Until then, the chit fund company must arrange funds on behalf of withdrawing/defaulting member to facilitate smooth payments of prize money and dividends every month to other chit members. Therefore, withdrawal is permitted subject to the condition that the total amount contributed by such a withdrawing member in the chit fund pool minus the company commission will be repaid to him/her at the end of the chit fund period or after another substitute is found in place of the withdrawing member.
Can I make chit payments in other branches of Kapil Chits?
Yes, you can make your chit payments at any branch offices of Kapil Chits.
What are the accepted modes of payment?
Online transfers, cheques, demand drafts, pay orders, and cash are all accepted modes of payment.
Under what laws or rules is Kapil Chits governed?

Kapil Chits’ operations are governed under The Chit Funds Act, 1982.

What is the difference between registered and unregistered chit fund companies?
Registered chit fund companies are regulated under government laws and are monitored by government departments and hence safe.
Unregistered chit fund companies are prohibited by law and their customers are completely at the mercy of their promoters without any support from the government and law enforcement agencies.
What are the modes of participating in the auctions?
Subscribers can participate in auctions in 3 ways:
i) Online Auctions.
ii) Submission of a Bid Offer Letter.
iii) Submission of a Bid Authorization Letter (this means authorizing a third person to participate in the bidding process on behalf of the subscriber. The third person needs to submit the said letter in the chit fund office with his/her ID proof to participate in the auction.).
What is a lot?
When more than one non-prized subscriber wants to take the prize money at the same discount, such subscribers are given/assigned token coins which are then put inside a container. The winning bidder is subsequently decided by randomly removing one of those token coins from the container. This procedure of deciding a winning bidder is known as a lot or lottery.
How many sureties or guarantors are required?

Normally for all chits, 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 chits’ future liability.

How soon can I expect payment once I win a bid in an auction?
The payment can be expected after the completion of documentation and other formalities.
What are the benefits of joining a vacant chit group?
Sometimes, due to unforeseen circumstances, there may be vacant slots in a chit group. Those vacant slots can be filled by adding subscribers to it. For the subscribers filling those vacant slots, all the dividends receivable till the date of their joining are earned by them, without any loss.

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