Except the last Subscriber, i.e., last Member to take the Chit amount at the end of the Chit Period, every Prized Subscriber / Subscriber taking the Chit on a discount in any Group of Chits offered by Prathithi Chits should provide some Security, as a measure of his assurance to the Company for repayment of the Prize / Chit amount. The various modes of Security acceptable to the Company as per its Rules and Regulations are as mentioned below.


1) Immovable Property as Security

In order to accept an immovable property as Security for prompt repayment of the Chit Amount, Subscribers willing offer their immovable properties will have to observe the following procedure.


Normally, the properties situated within the jurisdiction of a Civic Body like Town Municipalities, City Municipalities, Corporations, MUDA/BBMP/BDA, will be accepted as a Security. Agricultural Properties (lands), Panchayath Properties and Properties under "B-Khatha" are not accepted as Security.


The Subscriber taking the Chit will have to furnish to the Company a list of Title Deeds and Documents relating to the property to prove his legal and valid title to the property. Such Subscribers can obtain the list of documents to be furnished in respect of the property offered as security, from the office of the Company. After submission of the above documents at the office, they will be forwarded to the Panel Advocate of the Company for preparing a Legal Scrutiny Report. In the meanwhile, such immovable property will be inspected and Assessment of its Market Value will be carried out by the Panel Valuer/Engineer. Then, the person/s recommended by the Panel Advocate as the Title Holder/s, shall execute a Registered Mortgage of the said property in favour of the Company at the concerned Sub-Registrar's Office.


In such cases, the Subscriber will have to bear all expenses towards Documentation, Assessment of Market Value, Legal Scrutiny, Stamp Duty Payable on the Mortgage Deed, its Registration Charges and all other sundry expenses in respect of the Mortgage of the property in favour of the Company.


This process is likely to take a fortnight to a month and hence, the Subscribers intending to provide immovable properties as Security to keep such property papers ready for such processing, as THE CHIT AMOUNT / PRIZE MONEY WILL NOT BE PAID UNTIL COMPLETION OF THESE LEGAL FORMALITIES.


PRATHITHI CHITS PVT. LTD., RESERVES ITS SOLE RIGHT TO ACCEPT OR REJECT ANY PROPERTY AS SECURITY WITHOUT ASSIGNING ANY REASONS, even if the Subscriber has a valid and legal title to the property.


The same norms and criteria are applicable in case the properties offered as security belongs to a person other than the Subscriber, i.e., a Guarantor


2) LIC Policies as Security :


In case the Subscriber intends to give LIC Policies in his name or in the names of his Wife or Children, only the Surrender Value of such policies will be considered by the Company in determining the adequacy of the security and at no point of time the Sum Assured will be taken into account as Security. In such a case, the Original LIC Policy (duly discharged and assigned in favour of the Company) along with the Surrender Value Certificate issued by the LIC of India will have to be deposited with the Company. Policies issued by Private Insurance Companies will not be considered by the Company for security.


3) Fixed Deposit as Security :


Fixed Deposits in any Nationalised or Scheduled Banks in the name of the Subscriber or others as Guarantors, can be offered as Security for obtaining the Prize Money / Chit Amount by a Subscriber. In such cases, the lien in favour of PRATHTHI CHITS shall be noted on such Original Deposit Receipt by an authorized Bank Official with his designation and seal. However, the face value of such Deposit Receipt should be sufficient enough to cover the Chit Amount, Foreman's/Company Commission and other standard leviable charges and such Original Fixed Deposit Receipt shall be deposited with Prathithi Chits Pvt. Ltd.