Nagashiva Company pooling together 20 members to contribute towards the Chit group. Each subscriber agrees to contribute Rs.5300/- per month for 20 months towards the chit group.

So Rs.5000/- X 20 members + 6000 Company Commission ( 300 Per.Person Company Commission X 20 Members ) = Rs.106000

Every member gets the chit amount once, during the 20 month period through Auction.

Forman enters into an agreement with all the subscribers and getting approved from the Registrar of Chits after keeping the necessary security with the registrar.

After getting the necessary permission from the Registrar, Foreman conducts the auction.

For the Priority disbursal of Chit Group, Foreman conduct auction.

Only Non-Prized subscribers take part in the auction.

Subscriber who bid to the highest discount will get the chit amount.

Maximum Limit of discount will be 30%.

If more than one person bid for 30%, then draw will be conducted among the highest bidders.

Foreman disburses the Chit amount to the winner of the bid after taking the necessary guarantee for future liability.

The foreman commission is 6% of the Chit amount and this commission is included to the monthly installment.

The discount amount divided equally among all members as a share of Discount.

So every month, subscribers get some amount as Share of Discount.

So the subscriber has to pay the monthly installment deducting the Share of Discount.

Eg:- Rs.5300/- less Rs.1500/- (Share of Discount) = Rs.3800/- (Net Amount).

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