A chit fund company is as good as its Foreman

‘Foreman’ means a person who under the chit agreement is responsible for the conduct of the chit and includes any other person discharging the duties of the Foreman. It is the personality and conduct of the Foreman, whether individual or institutional, that lends strength to a chit Fund Company. A Foreman credited with qualities like promptness, straightforwardness and honesty attracts subscribers easily for the chit fund company. Similarly, basic dishonesty and unscrupulousness on the part of the Foreman can break it. The Foreman assumes a dual role. Besides being an organizer, he also is a subscriber in every chit group. He is also entitled to obtain one chit amount into the chit group without deduction of the amount. It is a good practice if the Foreman ploughs back the entire prize amount into the chit business to meet his future obligations promptly. This ensures prompt payment to subscribers even in the eventuality of some members defaulting on the payment of their installments or discontinuing their membership. Thus ensuring that failure on the part of some members does not become an excuse for the Foreman to delay the Bid Payable amount to the subscribers.

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