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Essential terms and conditions of chit fund

Chit Funds Act 1971

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—(1) Every agreement made under section 23 must contain all the following terms and conditions with the actual amounts, dates and other particulars necessary in each case:(a)that the chit fund is for a specific amount and for a specified number of subscribers only;(b)that the subscribers are to contribute equal portions of the amount;(c)that the contribution of each subscriber is to be paid to the chit fund company in money in equal amounts of a specified value during a specified period;(d)that each contribution is payable on a date specified for that contribution or within such number of days of grace after that date as may be specified;(e)that on or after each date on which the contributions are payable, the chit fund amount is to be put up for sale by the chit fund company among the subscribers either by auction or by way of sealed tenders;(f)that each of the subscribers is entitled to purchase the chit fund amount once and not more often during the period of that chit fund, and that no subscriber who has been declared the purchaser at any such sale is to be entitled or permitted to bid or tender at any subsequent sale;(g)that every bid or tender of a subscriber at a sale is to indicate the sum which the subscriber is willing to forego as interest for the privilege of obtaining the prize on that occasion;(h)that of the subscribers entitled to bid at any sale, the subscriber who offers the highest interest is to be declared the purchaser;(i)that the purchaser is entitled to receive the prize consisting of the chit fund amount less the interest offered by him or her, on producing guarantors to stand surety for the due payment of his or her future contributions in respect of that chit fund;(j)that the chit fund company is to deduct for commission and working expenses a specified sum or a sum bearing a specified proportion to the prize amount or to the chit fund amount;(k)that the interest is to be distributed in equal proportion among all the subscribers;(l)that a subscriber, who has not yet purchased a chit fund amount and who defaults in either the payment of a contribution or the production of guarantors is entitled to a refund of actual contributions already paid by the subscriber in accordance with section 31(2) and (3) or 32(2), as the case may be.(2) The agreement mentioned in subsection (1) must also contain —(a)the full name and address of the chit fund company and of each of the subscribers;(b)the business address of the chit fund company or the exact location of the place where the records of the chit fund are to be kept and where its business is to be transacted;(c)the number of the subscriber’s identity card issued by the Government or in the case of a subscriber who has not been issued with a Singapore identity card any other record of identification that may be prescribed; and(d)any other terms and conditions not inconsistent with this Act, or with the essential terms and conditions referred to in subsection (1), that are considered necessary for the better management and control of the chit fund.(3) In respect of every chit fund, the agreement must be signed in original and duplicate by the chit fund company and each intending subscriber, either in person or by a duly authorised agent, and each signature must be attested by a witness present at the time of signing.

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