{"id":18398,"date":"2023-12-20T03:50:31","date_gmt":"2023-12-19T22:20:31","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=18398"},"modified":"2025-04-05T10:39:53","modified_gmt":"2025-04-05T05:09:53","slug":"chit-funds","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/chit-funds\/","title":{"rendered":"What are Chit Funds?"},"content":{"rendered":"<h2>About Chit Funds<\/h2>\n<ul>\n<li>Chit funds are\u00a0a financial instrument that is\u00a0used in both borrowing and saving aspects.\u00a0<\/li>\n<li>Chit fund is also termed\u00a0Kuri and Chitty.\u00a0<\/li>\n<li>Chit funds are a kind of financial arrangement wherein a\u00a0few individuals gather and pool a fixed sum of money at regular intervals.\u00a0<\/li>\n<li>This is done with an understanding or\u00a0agreement that a single member of the group will\u00a0receive the total sum of money collected during each interval.<\/li>\n<li>This\u00a0process continues until every member has received their share of the pooled money.<\/li>\n<li>This type of financial instrument is\u00a0generally conducted by a chit-fund company that is responsible for the smooth carrying out of this process.<\/li>\n<\/ul>\n<h2>How Do Chit Funds Work?<\/h2>\n<ul>\n<li>Under a chit fund scheme, a\u00a0number of individuals\u00a0make contributions towards the chit value\u00a0at regular intervals for a\u00a0period equal\u00a0to the\u00a0total number of subscribers\u00a0or members (investors).<\/li>\n<li>A person,\u00a0chosen through an\u00a0auction or a lucky draw,\u00a0receives the money collected.\u00a0<\/li>\n<li>Through an auction allotment system, an individual who agrees to receive the lowest amount (with the lowest bid)\u00a0gets the money. It is known as a\u00a0reverse auction system.<\/li>\n<li>The\u00a0sum forgone by a winner is\u00a0distributed equally among the other bidders post subtracting a foreman\u2019s charges and commission.<\/li>\n<li>An amount that\u00a0each bidder receives is termed a dividend.<\/li>\n<li>A winning bidder will\u00a0continue to invest\u00a0even after agreeing to claim the sum.\u00a0<\/li>\n<\/ul>\n<hr \/>\n<h3>Q1) What are Mutual Funds?<\/h3>\n<p>A mutual fund is an investment option where money from many people is pooled together to buy a variety of stocks, bonds, or other securities. This mix of investments is managed by a professional money manager, providing individuals with a portfolio that is structured to match the investment objectives stated in the fund&#8217;s prospectus.<\/p>\n<p><strong>Source:<\/strong> <a href=\"https:\/\/timesofindia.indiatimes.com\/city\/vijayawada\/cops-lose-12-crore-chit-fund-scheme\/articleshow\/106139410.cms\" target=\"_blank\" rel=\"nofollow noopener\"><u>Cops lose Rs 12 crore in chit fund scheme, probe on<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Chit funds are a financial instrument that is used in both borrowing and saving aspects. <\/p>\n","protected":false},"author":5,"featured_media":18399,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-18398","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/18398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=18398"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/18398\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/18399"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=18398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=18398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=18398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}