1. Chits & Benefits

MSTAR Chits is a time-tested and trusted financial instrument, offering dual benefits of saving and borrowing. It serves as an excellent financial support system for a wide spectrum of individuals—from small savers and entrepreneurs to traders and business entities.

It enables subscribers to save systematically while also providing access to lump-sum funds when needed, whether for personal events like weddings, construction, or for business expansion and contingencies. Our chit schemes empower members to manage finances proactively while earning dividends through group participation.

• Ideal for both savers and borrowers
• Enables lump sum availability in emergencies
• Perfect for events like marriage, construction, etc.
• Suitable for business and industrial purposes
• Disciplined saving with potential returns

2. Remittance & Subscription

Monthly remittances are to be made as per the chit schedule. The first two installments must be paid in full. From the third installment onwards, dividends begin. Within 7–10 days of every auction, subscribers will receive an Intimation Card detailing the bid amount, last auction results, current installment due, and other relevant information.

Although we ensure prompt dispatch of intimation cards, postal delays or non-receipt cannot be accepted as reasons for missed or delayed payments. Subscribers are advised to remit the previous month’s due if the card is delayed. Payments can be made at any MSTAR branch with the latest intimation card.

• First 2 installments to be paid in full
• Dividend starts from the 3rd installment
• Intimation card sent every month post-auction
• Outstation remittance accepted via Demand Draft
• Dishonored cheques invite penalties and cash-only rule

3. Passbook Facility

Subscribers will receive a passbook upon payment of the second installment. It must be presented with every payment for updates. In case of loss, a duplicate can be issued upon payment of Rs. 25/-.

• Issued after second installment
• Required for monthly payment entries
• Duplicate issued for Rs. 25 if lost

4. Auction Procedure

Subscribers can participate in monthly auctions in person, through a representative, or in writing. Auction duration is 5 minutes and follows a strict bidding format. Sealed tenders are accepted in specific groups only.

• Auction held monthly at pre-defined time
• Minimum discount 5%, maximum 40%
• If more than one bids at 40%, draw is conducted
• Sealed tenders applicable for specific groups
• Telephonic/telegraphic bids not accepted

5. Dividend Distribution

Dividends are equally distributed among all members through installment adjustment, post deduction of 5% Foreman commission. The first two installments do not carry dividends. Late payments result in dividend forfeiture and penalty interest.

• Equal share of dividend every month
• Foreman’s commission at 5%
• No dividend on first two installments
• Penalty and forfeiture for delayed payment

6. Prize Money Disbursal

Prize money is released before the next auction, subject to satisfactory security. Combined future liabilities across groups and surety responsibilities are evaluated. Prize money is paid via Account Payee cheque or Demand Draft (after deducting DD charges).

• Security required: surety, property, or LIC policy
• Multiple chits and surety responsibilities are combined for liability
• Proposal to be submitted within 7 days of auction
• Documents signed in presence of branch officials
• GST of 12% applicable on Foreman Commission

7. Re-Auction

If the prized subscriber fails to claim the prize within 60 days, re-auction will be held under Section 22(2) of the Central Chit Funds Act, 1982. The earlier declared dividend is canceled and recoverable from the subscriber.

• Applicable if prize is unclaimed within 60 days
• Earlier dividend is canceled
• Recovery initiated for any difference

8. Discontinuation Policy

Timely payment from all members ensures the chit’s success. In case of discontinuation, a subscriber can request for substitution. Refund is only possible after successful substitution or group termination.

• Substitution possible upon request
• No guarantee of timeframe for substitution
• Refund post 5% Foreman deduction
• Final refund upon group completion if no substitute found

9. Security Requirements

• Up to ₹50,000 – 1 Govt. Surety (Net Salary ₹8,000)
• ₹50,001 – ₹1 lakh – 2 Govt. Sureties (Net Salary ₹10,000 each)
• ₹1 lakh – ₹2 lakh – 2 Govt. Sureties (Net Salary ₹12,000 each)
• ₹2 lakh – ₹5 lakh – 3 Govt. Sureties (Net Salary ₹15,000 each)
• Above ₹5 lakh – LIC Policy / Property (1.5× liability value)

• Private company employees not accepted as surety
• Original salary certificates with seal & signature mandatory
• Group D employees (e.g. peons, watchmen) not eligible
• Minimum 6 years of remaining service required