Who can subscribe to a Chit Group?

Any individual above 18 years can register as a Chit member with Muthoot Chits. Suitable for individuals from all segments of society, chits delivers financial support for all your needs. Whether to meet a specific need or to suit your lifestyle, Muthoot Chits is the solution to all your requirements.

It is necessary to keep your ability to pay in mind when selecting a chit group from the multiple options. Keep the following points in mind before enrolling in any group: –

  • Before enrolling in a Chit Group, familiarize yourself with the ‘Security Norms’ to be fulfilled at the time of Prize money disbursement.
  • Decide an affordable monthly payment to ensure payment monthly instalments are paid before the due date smoothly.
  • Check the terms and conditions of the auction process, the forfeiture penalty clause in the event of discontinuation, interest on late payments, etc.

To identify the best Chit group, you need to evaluate your income and expenses. The following table is a good example of calculating a chit group instalment that will be comfortable for you to pay.

Monthly Income / Expenses Analysis

Income Expenses
Description Value Description Value
Net Salary 30,000 Rental Contribution 5,000
Other Income if any Food Expenses 5,000
Conveyance Expenses 4,000
Family Contribution 2,500
Phone Expenses 1,250
Loan EMI Contribution 3,000
Other Expenses 1,250
Net Salary 30,000 Total Expenses 22,000
Balance Available = (Net Salary – Total Expenses) 8,000
Comfortable CHIT Instalment = (Balance Available)/2 4,000

What happens if you discontinue a Non-Prized chit?

Discontinuation of Chit may result in substantial loss, so it’s necessary to analyze the monthly income/expenses and select the correct chit group with a comfortable chit instalment. Unlike other investments, members in a Chit group come to an agreement where each member agrees to pay a pre-decided subscription every month till the agreed period. Hence cancellation/withdrawal of chit is not allowed/permissible. There are two things/situations that will arise if you decide to discontinue from the Chit Group:

  1. You can bring in a third person who is interested to subscribe/continuing the chit in your place. If the prospect is acceptable to MPCIPL, we will consent for the transfer of chit from you (TRANSFEROR) to the new subscriber (TRANSFEREE). This is also called assignment (substitution) of chit. In this case, the new subscriber must bring the total amount due till present and the Old member (TRANSFEROR) will be refunded with his amount after deductions (if any) by MPCIPL, once the dues are cleared by the new member.
  2. If you discontinue the Chit by not paying an instalment, the Foreman commission of 5-7% of the Chit value with GST will be deducted. The balance if any will be settled only after substitution (if the company gets a replacement) or completion of the Chit period, whichever is earlier.
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