Who is Foreman and his duties in the Chit fund?

Foreman Definition

The “foreman” defines the one who is accountable for handling the chit fund process within the right flow. it should include a person discharging the account functions or a person who discharges the functions of the foreman underneath section 39”. 

Chit Meaning

Chit or Chit fund or chitty means that dealing or transaction in which someone agrees with a group of persons. in the group, each one of the persons will subscribe an exact amount of cash every month. The subscriber will take the total cash at the actual auction. 

Chit fund

Chit fund may be a rotating saving theme that has been an area of India's economic system for over a century currently.

Chit fund meaning

A chit fund means a monetary instrument that's a combination of savings and borrowings. it's been a part of India’s financial setup for over a century.

Chit Fund Company

A chit fund company is an entity managing a chit fund scheme that is sometimes remarked as a chit fund company. The person taking part in an exceedingly chit fund scheme is remarked as a member. chit fund companies can typically have many various chit fund schemes, with every of the chit fund schemes having a collection of members and a limited period.

Who is a foreman in chit funds? 

The whole chit fund operations are supervised by one member of the fund called the Chit Fund Foreman. Foreman acts on behalf of the chit funds management company gathers the monthly investment from each chit funds member to record member details and overlook the auctioning process. The chit fund company provides the Foreman with a pre-determined total of cash (usually 5%) of the amount collected as salary for his services. 

In certain chit auctions, agreements are signed on a loyalty base. At a similar time, the foreman may be chosen by the members of the auction. It should be based on the elder one or the foremost practised one in this case. These are the roles and responsibilities of a foreman in a chit fund auction. The person who bids the lowest amount wins the auction. Here, the foreman gets 5% as foreman commission of the bid amount.

 Foreman person who operates chitties writes the names of each subscriber on pieces of paper and folds them and the subscriber names written on the paper are not visible to the other people who are gathered there.

What are the duties of a chit fund foreman? 

As per section 22 of the account Fund Act of 1982, here are the few duties that got to be performed by the foreman of the chit. 

(1) The foreman shall, on the prized subscriber enhance with ample security for the due payment of future subscriptions, be sure to pay him the prize amount: providing the prized subscriber shall be entitled to the payment of the prize amount with none security and if he agrees to the deduction therefrom of the number of all future subscriptions and in such a case, the foreman shall pay the prize amount to the prized subscriber inside seven days once the date of the draw or before the date of following succeeding instalment, whichever is earlier: Provided more than where the prize amount has been paid to the prized subscriber beneath the primary provision, the amount subtracted shall be deposited by the foreman in an approved bank mentioned in the chit agreement, and he shall not withdraw the amount thus deposited aside from the payment of future subscriptions. 

(2) Suppose, unsettled to the non-payment of the prized subscriber, the prize amount required in respect of any draw remains unpaid till the date of consecutive succeeding instalment, the foreman shall deposit the prize amount immediately in a separate account in an approved bank mentioned in the chit agreement and confidential in writing the fact of such deposit and on the basis to the prized subscriber and therefore the Registrar. Only if wherever any prized subscriber doesn't collect the prize amount in respect of any instalment of a chit at in 2 months from the date of the draw, it shall be receptive the foreman to carry another draw in respect of such instalment. 

(3) Each payment of the prize amount or the number of future subscriptions under subsection (1), and also the deposit of the prize amount under subsection (2), shall be intimated to the subscribers at the following the succeeding draw, and also the particulars of such payment or deposit shall be entered in the minutes of the proceedings of that draw. 

(4) The foreman shall not acceptable to himself any amount in more than what he's entitled to under clause (b) or clause (c) of subsection (1) of section 21: only if wherever the foreman is himself a prized subscriber, he shall be entitled too acceptable to himself the prize amount subject to his yielding with provisions of section 31: Provided more than the foreman could acceptable to himself the interest accruing on the amount deposited underneath the second provision to subsection (1). 

(5) The foreman shall not admit a person as a subscriber to a chit, if, by such admission, the entire number of tickets mentioned in the chit agreement is raised. 

(6) The foreman shall distribute among the subscribers by the account agreement, the dividend either in cash or by the approach of adjustment towards the subscriptions collectable for consecutive instalments if any. 

Foreman Commission in Chit Fund Companies in India

A few best chit fund companies in India are famous like

ksfe chitty

margadarsi chit fund

shriram chits

kapil chits 

gokulam chits

Balussery chits etc,...  maintain more than one foreman as they have many branches in many places in different states. They collect 5% of foreman commission from each auction for a chit group as per Chit Fund Act, 1982.

Conclusion 

The individual under the chit agreement is responsible for the conduct of the chit and takes in any person who emits the functions of the foreman under section 39 of the Act. Thus, the foreman permits the to beginner run several chits simultaneously.  Earlier approval of the state government is required before starting each chit.

Frequently Asked Questions
 
What is the Foreman commission?

Foreman commission: underneath the Act, the ‘foreman’ is to blame for managing the account fund. He's entitled to the most commission of fifty of the account quantity. The Bill seeks to extend the commission to seven-membered.

Will Government appoints Foreman for Chit Funds?

The central Government of India regulates chit fund acts but doesn't arrange the Foreman in the same way state governments also don't appoint Foreman instead they appoint Chit Registrar for chits registrations in all places. some chid funds like t chits, ksfe chitty, chit monks, etc,... will be regulated by state governments in only some aspects of the company.

Also read: What is a chitfund?