Security Norms

The Prized subscriber/successful bidder shall provide security of any one of the following types either single or in combination to the satisfaction of the Company.

1) Immovable Property: Property of the prized subscriber or a third party Guarantor situated within BBMP/Corporation/BDA/MUDA limit is accepted as security. Gram Panchayat/Agricultural properties and also property having B-Khatha will not be accepted. The procedure is as below:

Subscribers must submit photocopy of all the relevant papers of the property to the concerned branch. These papers will be subjected to preliminary scrutinization by the concerned Foreman. Once the documents are found ok with basic eligibility, subscribers will be intimated to submit the original papers and same will be forwarded to our empanelled Advocate for detailed verification and Legal Opinion. Upon obtaining positive legal opinion, Valuation of the property will be done by our empanelled valuer and spot inspection will be conducted by the Foreman to assess the value and acceptability of the property. Only 50% of the market value as given by the Valuer in his report will be considered by the Company. Once the Legal Opinion and Valuation is over, Registered Mortgage of Title Deeds will be done at the Sub-registrar’s office after getting clearance from the Head Office.

Subscriber must pay the charges towards documentation, Legal Opinion and Valuation of the property to the company. Applicable stamp duty and other related charges for mortgage registration must also be borne by the subscriber at the sub-registrar’s office.

 This whole process beginning from preliminary scrutinization to mortgage registration may take at least 15 -20 days time to complete and hence subscribers must plan properly and ensure that the property papers are acceptable even before bidding to avoid delay in receiving prized money.

However it is the sole discretion of the ‘MSIL Chits’ to accept or reject any property based on the factors like location, saleability etc even if the owner has got the valid title over the property and legal opinion is clear.

2) LIC Policy: The subscriber needs to obtain Surrender Value certificate of the Policy from LIC of India. The surrender value only will be considered by ‘MSIL Chits’ and not the sum assured. The surrender value of the policy must be sufficient enough to secure the future liability/installments to be paid. The subscriber must get the policy assigned from LIC in favour ‘MSIL Chits’ and upon receiving the assignment confirmation from the LIC, file will be processed to disburse the prize money. The original policy along with surrender value certificate will be held by the company. The subscriber should continue to remit premium in respect of the insurance policy without default.

In case of unit linked policies (market plus, money plus etc), only 50% of the surrender value will be considered as it fluctuates depending up on the market conditions.

Insurance policies of the private insurance companies will not be accepted.

3) Fixed Deposits: Fixed Deposits of any Nationalized/Scheduled/banks approved by the company will be accepted as security. The face value of the FD must be sufficient enough to secure the future liability. The deposits shall be in the name of the subscriber or in the name of any other person. The Lien in favour of ‘MSIL Chits’ need to be noted in the bank’s records and same should be written on the original FD receipt by the bank. The original FD receipt will be held by the company.

The Fixed Deposit from the financially strong Co-operative Banks as given by the Registrar of Co-operative societies, Bangalore will be accepted only up to the value not exceeding Rs.2 lakh.

4) Bank Guarantee: Bank Guarantee from any Nationalized/Scheduled/banks approved by the company in the format prescribed by the company equivalent to the future liability will be accepted as security. Such Bank Guarantees will have to be confirmed by the concerned Regional/Circle office. The expiry date of the bank guarantee shall be 3 months after the termination date of the Chit group.

5) Non-Prized Pass Books: The paid-up amount in the Non-prized pass books (Gross Installment amount remitted minus Foreman’s commission of 5% oh the chit amount) will be accepted as security. The paid-up amount should exceed future liability amount plus interest at 18% P.A. till the termination of the non-prized Chit offered as security. The non-prized passbook shall be in the name of the prized subscriber or any other person.

The non-prized passbook should be pledged in favour of the company and the same will held by the company until the liability in the prized chit is fully cleared.

The Non-prized Chit will be allowed to be auctioned only after the pledge is cancelled by the company.

6) National Savings Certificate, Postal Life Insurance, Kisan Vikas Patra: NSC, PLI, KVP shall be accepted as security subject to noting the pledge/lien in favour of MSIL Chits. Incase of PLI, only surrender value shall be considered as security value.