Glossary
Throughout the years, The Future Hunters have coined over 100 new terms and concepts. It is our belief that in order to truly understand where the future is moving, you cannot solely rely on current or outdated vacabulary. You must invent your own.
Aa
Act
The Chit Funds Act, 1982.
Approved Bank
A bank that is approved by the State Government for the purpose of depositing chit money.
Auction
The process by which the prized subscriber is determined. This is typically done by offering the chit amount at a discount, and the subscriber willing to accept the lowest sum is declared the winner.
Agent
An individual who works for the foreman or chit fund company to enroll new subscribers into a chit group. They often earn a commission for each member they bring in.
Agent
An individual who works for the foreman or chit fund company to enroll new subscribers into a chit group. They often earn a commission for each member they bring in.
Bb
Bidder
A term for a subscriber who participates in the auction to become the prized subscriber.
Bidding Amount
The amount of discount a subscriber offers to forgo during an auction. The highest bidder (who agrees to take the lowest prize amount) wins the pot.
Cc
Chit
A transaction by which a person, called the foreman, enters into an agreement with a number of subscribers that every one of them shall subscribe a certain sum of money in periodical instalments for a certain period. Each subscriber in their turn, as determined by lot or by auction or by tender, is entitled to the prize amount.
Chit Agreement
The document containing the articles of agreement between the foreman and the subscribers relating to the chit. It outlines the rights and obligations of all parties involved.
Chit Amount
The total sum of subscriptions payable by all the subscribers for any instalment of a chit, without any deduction of discount.
Chit Business
The business of conducting a chit.
Chit Group / Group
A specific chit scheme with a fixed number of members, a set chit amount, and a defined duration. A chit fund company runs multiple such groups simultaneously.
Commission
The fee or percentage of the chit amount that the foreman is legally entitled to for organizing and managing the chit. As per the Act, this is typically capped at 5% of the chit amount.
Dd
Defaulting Subscriber
A subscriber who has not paid their subscription in accordance with the terms of the chit agreement.
Discount
The sum of money which a prized subscriber has to forgo from the chit amount. This amount is distributed among the subscribers as a dividend after deducting the foreman's commission.
Dividend
The share of the discount that is distributable rateably among the subscribers at each instalment of the chit.
Draw
The mode of ascertaining the prized subscriber at any instalment of the chit, which can be by lot or by any other manner specified in the chit agreement.
Duration / Tenor
The total period for which the chit group operates, which is equal to the number of subscribers in the group (e.g., a 25-member group will have a duration of 25 months).
Ee
Early Bidder
A subscriber who bids for and wins the prize amount in the initial months of the chit. They often have an urgent need for funds and are willing to accept a lower prize amount (a higher discount).
Empty Chit / Vacant Chit
A situation where a subscriber defaults and drops out of the group. The foreman is then responsible for finding a replacement or subscribing to that slot themselves to keep the chit running.
Ff
Foreman
The person who, under the chit agreement, is responsible for the conduct of the chit. This individual, firm, or company organizes the chit, collects subscriptions, and disburses the prize money.
Fraternity Fund
An alternative name for a chit fund, often used in certain regions. The Act recognizes this as a synonym.
Ii
Instalment
The periodical payment that each subscriber is required to make.
Kk
Kuri / Chitty
Alternative regional names for a chit fund, recognized under the Act.
Mm
Minutes Book
A book maintained by the foreman to record the proceedings of each draw of the chit.
Maturity
The end of the chit's duration. Subscribers who have not won the prize amount receive their full subscribed capital back at maturity.
Minutes of Proceedings
A detailed record of what transpires at each auction or draw, including the number of members present, the winning bidder, the bid amount, the prize amount, and the dividend declared.
Nn
Non-Prized Subscriber
A subscriber who has not yet received the prize amount.
Non-Bidding Subscriber
A subscriber who needs the funds but does not want to participate in the auction. In some chits, if there are no bidders, the prized subscriber is determined by drawing lots from the non-prized members.
Pp
Prescribed
Prescribed by the rules made under The Chit Funds Act, 1982.
Prize Amount
The chit amount less the discount. This is the amount the prized subscriber receives.
Prized Subscriber
A subscriber who has received the prize amount in a particular instalment.
Passbook
A subscriber who has recA small book, similar to a bank passbook, provided to each subscriber by the foreman. It records all payments made, dividends received, and the overall status of their account in the chit group.eived the prize amount in a particular instalment.
Prize Money / Pot
A colloquial term for the prize amount available to be won at each instalment.
Rr
Registrar
The officer appointed by the State Government to register and regulate chit funds within a particular jurisdiction.
Reserve Fund
A fund created by a company carrying on chit business, to which a certain percentage of its profits are transferred annually.
Rotating Savings and Credit Institution (ROSCA)
A formal term for a chit fund, highlighting its nature as a collective savings and credit scheme.
Ss
Security
An asset or guarantee provided by a prized subscriber to the foreman to ensure the payment of future subscriptions.
Subscriber
A person who joins a chit and agrees to pay the periodical instalments.
Subscription
The amount of money paid by a subscriber for each instalment of the chit.
Surety
A person who gives a guarantee for the performance of an obligation by a prized subscriber.
Security Documents
Documents like property deeds, salary certificates, or guarantees from other subscribers that a prized subscriber must provide to the foreman to secure the payment of their future instalments.
Settlement
The process of a subscriber receiving their final dues from the chit fund company after the chit's duration is complete, assuming they were a non-prized subscriber.
Tt
Ticket
Represents the share of a subscriber in a chit. A subscriber may hold one or more tickets.
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