Who is a foreman in chit funds?

Chit fund industry has been evolving from day to day. Apart from other main factors in it, the foreman is one of the most important roles to be taken in hand effectively. The foreman of the chit fund has the same meaning as the term “foreman” in clause(j) of Section 2 of the Chit Fund Act, 1982.

As per Section 2 of the Chit Fund Act,

“(j)” The “foreman” denotes the person who is responsible to handle the chit fund process in the right flow. It may include any person discharging the chit functions or any person who discharges the functions of the foreman under section 39”.

Chit or chit fund or chitty means a transaction in which a person enters into an agreement with a group of persons. In the group, every one of the persons can subscribe to a certain amount of money on a monthly basis. In return, the subscriber can take the whole money at the particular auction. The person who bids the lowest amount wins the auction. Here, the foreman gets about 5% of the bid amount.

So, what are the duties a foreman has to do?

As per section 22 of the Chit Fund Act of 1982, here are the few duties ought to be performed by the foreman of the chit.

• The foreman must furnish the necessary security from the subscriber for future subscriptions.
• He needs to keep records regarding the monthly auctions and the subscription amount details. Other than that, he is responsible for conducting the auctions successfully.
• In addition, he will be paid a fee of 5% of the total auction amount collected.
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• In some chit auctions, agreements are signed on grounds of loyalty. At the same time, the foreman can be chosen by the members of the auction. It may be based on the elder one or the most experienced one in this case. These are the roles and responsibilities of foreman in a chit fund auction.
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