Chit-Funds are a popular mode of saving cum borrowing from time immemorial. The concept of Chit Fund is based upon the principal of mutuality, whereby a group of persons participate in a scheme to contribute fixed periodical amounts and distribute the amount so collected, in rotation, to each of the participants. The foreman i.e., the Chit Fund Company itself carries on this scheme of a chit fund. Example: Functioning of Chit funds are better explained using an example. Take a typical chit fund with 25 members contributing Rs 100 per week. This fund will run for 25 weeks. On the first week all members will contribute Rs 100. An auction meeting will be conducted, and the foreman of the chit fund will preside over it. The total amount will be Rs 2,500. The auction will start with this amount. Bidders will start bidding by discounting this amount (reverse bidding). Let us consider that lowest any person bids is Rs 2,150 (a discount of Rs 350). This amount (Rs 2,150) is given to this winning bidder. Rest of the amount (Rs 350) is divided by 25, bringing the discount per person to Rs 14. This discount amount is returned back to each member. Sometimes a part of this may be kept by the foreman as service charges, usually in organised chit funds. These (25) subscribers constitute a Chit Group and the Chit fund company can run many such groups. For each group approval of bye-laws and commencement certificate from the office of the Registrar, Chit Funds, is must. The share of a subscriber in a chit is also known as ticket.