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What is a Chitty?
The word ‘Chit,’ suggests the origin of Chit Funds. ‘Chit’ means a written note on a small piece of paper.The Malayalam equal for the word ‘chitty,’ is ‘Kuri,’ which has been derived from ‘Kurippu’ ( a piece of writing or script). The term ‘Chitty’ or ‘Kuri’ is derived from the root word ‘lot.’ Foreman (person who operates chitties) writes the names of each subscriber on seperate pieces of paper and fold them in such away that the name written on the paper is not visible to the assembled people there.
These slips where then placed in to a pot or vessel . After shuffling these pieces of paper throughly, one piece of paper is taken outside by one of the members of chitty assembled there . In other words, one ‘Narukku’ also means one member.The prized Chit is removed from the vessel, and the proceedings repeated, in the next installments. The Chit/ Kuri/Narukku thus play a crucial role in the allotment of the prize amounts.Read More
According to the Chit Funds Act of 1982, the Government of India defines a “chit” as “a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical instalments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount.”
Or in simple words, a chitty is a contract between the Foreman and the Subscribers. As per the contract, each subscriber agrees to remit a fixed amount of money in specific intervals for a specific period.
KSFE Chitty Campaign 2022
We have launched a new Chitty Campaign for the month of April, May and June 2022, with an attractive Prize Scheme. Bumper Prize of 25 sovereign gold will be given to one person by drawing a lot from all customers who have joined the chitty during these months. Besides, 5 sovereign gold each will be given to 32 persons as Regional Level prizes. Chitty loans up to 50% of the sala will be available to non-prized customers.
How to join KSFE Chitty?
A person can enroll in a chitty either by visiting the Branch or through the agents of KSFE. You may either click the feed-back or directly ring to any one of the Branches which is nearer to your location. The total of the periodic subscription, called the chitty amount, will be given out as “prize money” to the person who bids by allowing for the maximum reduction in the prize money.The maximum reduction possible is 30%, 35% and 40% depending on the type of chitty .
Thus each subscriber gets an opportunity to receive the prize money once during the tenure of the chitty. All the promoters have to contribute the periodic subscription till the end of the chitty.Read More
Chitty is the main product of KSFE
It is a unique financial product, which blends the advantages of both investment and advance. It is a risk free safe haven for the public as KSFE conducts chitties, fully governed by the provisions of Central Chit Fund Act 1982 only. Installment per month for chitties range from Rs. 1,000 to Rs. 6,00,000 and the usual duration of chitties range from 30 months to 120 months. KSFE conducts normal chitties (Single division) and division chitties (usually called Multidivision chitty or Narukku Lela chitty).Read More
Main Features of KSFE Chitties
The total of the periodic subscription is called the chitty Sala. The number of subscribers (Chittals ) in a chitty will be equal to duration of chitty in months ( in the case of single division chitty). Auction will be conducted every month to choose one Chittalan(Subscriber of the chitty) who bids the chitty for the maximum discount and that person will be given Prize Amount. In the case of Multi Division Chitty the number of persons prized in each month will be equal to number of divisions. The maximum discount possible is 30% in the case of single division chitties. For Multi Division Chitty, maximum discount possible is 30%, 35% or 40% depending on the duration of the chitty. Multi Division Chitty having more than 100 month duration can be auctioned up to a discount of 40 % ,while chitties having duration from 60 months to 99 months can be auctioned up to a discount 35% and chitties with duration less than 60 can be auctioned up to a discount 30 % . As per the prevailing Chitty Act, if there are more than one subscriber interested in bidding for maximum discount , the Chittal numbers of the such bidders will be put to draw to select the bidder for the month. If no subscriber is willing to bid the chitty for maximum discount, auction will begin from Foreman commission and the subscriber who bids for maximum discount will win the auction.
In multi diivision chitties having 4 divisions there will be one draw and 3 auctions. All non-prized subscribers who have remitted the instalment for the month will be eligible for draw to choose one subscriber who will get the maximum prize amount (ie Sala amount-Formans Commission of 5% of the Sala) . The other three auctions will determine the subscribers who bids the chitty for the highest discount. For chitties having divisions more than 4 also, auction is conducted in the same pattern ( No: of draw and auction will vary as per total number of division in that Chitty). If there is no chittalan ready to bid the chitty for the month then one chittalan will be selected from all non prized chittals of the chitty (who have remitted instalment for the month) by draw who will get the chitty prize amount in full discounting the Foreman Commission only.
Thus each subscriber gets an opportunity to receive the prize amount once during the tenure of the chitty. All the subscriberss have to contribute the periodic subscription till the end of the chitty.The amount discounted from the prize money of the auctioned chittalan who bids the chitty for a reduced amount include the Foreman commission.The balance amount will be given as dividend to all chittals of the chitty.The prized chittalan who doesn’t pay the instalment on due date will not be eligible for dividend.Read More
How to auction KSFE Chitties
A chittalan can directly take part in auction which will be conducted in KSFE branches on the due date of chitties at fixed times specified in the chit agreement .Those who can’t directly attend the auction can authorize any other person as proxy for the purpose by giving authorization letter in the prescribed format or can give proxy to respective Branch Mangers showing the maximum amount up to which the chittalan wants to auction the chitty. If the amount shown in the proxy is higher than the highest amount bid by the directly attending chittals then that proxy will win the auction for an amount normally Rs.1/- above the highest amount bid by other chittals.Read More
Securities for Availing Prize Money
Security for availing net chitt amount can be submitted in various modes, such as personal surety of salaried people ( State Govt, Central Govt, Other Institutions approved by KSFE from time to time provided they fullfill other condition specified seperately) landed property, deposit receipts Gold ornaments and coins, Non prized chitty pass book of KSFE, Life Cover Policies, Bank Guarantee etc. Each type of security has to fulfill conditions laid down by KSFE.
Security is needed only for the release of future instalments to be paid after payment of the chitty which is called future liability. Security can be released after payment of entire instalments of the chitty. In case the subscriber has nothing to offer as security then he/she can deposit an amount equivalent to the future instalments, in various deposit schemes of the Company,which is accepted as security and balance amount is released.Read More
Long Term chitty
Long Term chitties are investment chitties. Duration of these chitties start from 60 months to maximum 120 months. Long term chitties are more beneficial to customers who wishes to invest, as they get high profit as dividend. Preplanned long term chitties help the common customers to satisfy their needs instead of loans and other schemes. It is a safe way to make large amount of money for future needs by paying small installment amount .Read More
Short Term Chitty
KSFE conducts chitties of different durations. Short term chitties ranging from 30 months to 60 months duration are appropriate for subscribers who need the prize money immediately, as there will not be more customers for bidding the chitty for maximum discount and hence better chance for bidding chitty early and the subscribers can auction the chitty for an optimum amount to meet their emergencies.Read More
At present most common Multidivision chit in KSFE consists of one lot and three auctions in a month. The uniqueness of this chitt is that each Non-Prized subscriber will get a chance every month to get full amount of prize money after deducting foreman commission and the remaining non-prized subscribers will have the opportunity to participate in 3 auctions. The total discount excluding foreman commission received from all divisions is distributed equally among all subscribers in the chit. This chitty attracts more customers, as there is a chance of luck to get the full prize amount through draw as well as they obtain more turns to participate in auction if they prefer to.This is a good scheme which the customers can opt instead of loans.
Customer can choose the appropriate chitts from the various branches of KSFE according to their needs.Read More
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Turn over (March 2022)