VBR Snehanidhi Chits
The VBR Snehanidhi Chits is established to promote financial discipline, mutual support, and transparency among its members. The scheme provides a structured savings and borrowing mechanism, ensuring fairness, accountability, and trust. By participating in this scheme, each member agrees to abide by the rules and regulations outlined herein, thereby contributing to the collective benefit of all participants.
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What is a Chit Fund
A Chit Fund is a traditional financial system in India that combines both savings and borrowing within a group of people. It’s essentially a rotating savings and credit association, regulated under the Chit Funds Act, 1982.
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Eligibility to Become the Subscriber
Under the Chit Funds Act, 1982, the eligibility criteria are fairly straightforward:
Individuals: Any person who is competent to contract under the Indian Contract Act (i.e., 18 years or older, of sound mind, not disqualified by law).
Companies: Registered companies can also subscribe, provided their Memorandum of Association allows participation in chit funds.
Partnership Firms: Eligible if permitted under their partnership deed.
Trusts or Societies: Can subscribe if their governing documents allow such financial participation.
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Why Surety Is Required
Risk Management: Once a subscriber takes the lump sum, they still owe future contributions. Surety ensures they don’t default.
Legal Compliance: Under the Chit Funds Act, 1982, foremen are empowered to demand security from the prized subscriber before releasing funds.
Protection for Other Members: Guarantees that the fund remains solvent and fair for all participants.
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