Eight Point Checklist for Chit Subscribers

Eight Point Checklist for Chit Subscribers

Most of us straight away agree we at some point of time have invested into chits for the instant borrowing facility it offers. We have invested most of the time with a common friend or a trusted neighbour. Did you know that this trusted neighbour or the common friend do not hold any legal protection for your investment? If anything goes wrong, you would not have an option to proceed legally. For the matter of fact, 80% of chit market in India is unorganized.

The next question should be what is an organized chit market and how should we safely invest in chits. The chit fund companies in India are regulated by Registrar of Chits. The companies organizing chits should register with Registrar of Chits. This is known as organized chit market in India. You would be having a legal cover in case things go wrong. We made an effort to prepare a 8 point check list that should help everyone who is looking to invest in chits.

Is the company registered?

The first thing to double check before making a decision to go with a chit fund company is to check whether they are a registered company with MCA. This can be done through online search of the company name. A registered company gives you a secured feeling that everything is legally right with the company formation. Do not go with a company that is not registered.

CIN / Registered number verification

Verify the registered number / CIN number on the MCA website (http://www.mca.gov.in/) and confirm the registration. Check if the company is filing the annual reports on a regular basis. Take into consideration the date of company formation. Check if you find any company news or activities in Google News so on. All of this verification enables us to gain trust on the chit fund company.

Is the chit group registered?

Few state governments have chit fund administration sites like T Chits (www.tchits for Telangana. As a subscriber you can go and verify if the chit group that you are about to invest is registered and approved by these entities. Please note chit group registration is different from company registration.

Check for complaints

Spend more time online to see if there are any registered complaints against the chit fund company. Also take into consideration google review, social media presence and online reputation overall. Stay away from the company if you feel online reputation is not up to the mark.

Check company experience

Verify if the company has got experience in handling chit groups earlier. Gather information or ask for information from the company as to how many chit groups they have successfully handled in the past. What value addition the company offers in addition to its competition? Look at the reputation of the promoters of the company, the number of years in operation and the value addition they offer. You can also ask for a quick discussion with an existing subscriber of a company.

Can you last full term?

Chits also demand your commitment as you would be part of a chit group that continues for a foresaid period of time. If you would drop half way through or in middle that would result in inconvenience to other subscribers in the group. It also puts your personal reputation at stake. It is good to be very specific at the start and choose the time period chit scheme that is convenient to you.

Commission and Pre-closure charges

Before making a final call, please compare the commission the company charges and also know your pre closure charges and verify them with market standards. At this state you need to once again ask for the value addition the company offers when compared to competition. The value addition may be in the service or in the charges.

Read all documents before you sign

Read all scheme related documents carefully before you sign. Make sure you do not sign any blank papers even if the company insists you to sign. Please do not hesitate to drop from a chit fund company that asks you to sign on blank papers.

At IBG eChits, we ensure and educate our subscriber to verify all the above points before investing with us. The value addition that we offer straight to our customers is electronic or eChits. You can stay in control of your chit anytime, anywhere with our advanced systems at your service. For more information, visit www.ibgechits.com or email us at info@ibgechits.com

Comments (No Responses )

No comments yet.