A complete reference of chit fund terminology — from auction to foreman commission.
Chit FundA savings and credit scheme where members pool money monthly and each member takes turns winning the entire pool through an auction.Chit ValueThe total prize money — equal to the monthly contribution multiplied by the number of members. E.g., 25 members × ₹4,000 = ₹1,00,000 chit value.ForemanThe organiser of the chit fund. Responsible for collecting contributions, conducting auctions, and paying prize money. Earns a commission (max 5% under law).Foreman CommissionThe fee charged by the foreman for organising the chit fund. Legally capped at 5% of the chit value per month under the Chit Funds Act 1982.AuctionThe monthly process where members bid to win the prize pool by accepting a discount. The member who bids the lowest amount wins.Prize MoneyThe amount received by the auction winner. Equal to chit value minus the auction discount minus foreman commission.DividendThe portion of the auction discount shared among non-winning members, distributed as a reduction in their future monthly contributions.SubscriberA member who participates in a chit fund. Also called “prized subscriber” after they have won the prize.ChittyThe Kerala term for a chit fund. Governed by the Kerala Chitties Act 1975.KuriAnother term for chit fund used in Kerala and parts of South India.Registrar of Chit FundsThe state government official responsible for licensing, regulating, and auditing chit fund operators in that state.Certificate of RegistrationThe official license issued by the Registrar of Chit Funds to a legally operating chit fund company.Non-prized SubscriberA member who has not yet won the auction and is still eligible to bid in future months.Prized SubscriberA member who has already won the prize money but must continue paying monthly contributions until the chit ends.Chit AgreementThe legal document signed by all members and the foreman outlining the terms, duration, member count, and chit value.