The name picked up gets the whole collection of funds.
The person in charge of the group picks up a paper slip in front of all the group members. The names of all the members are written on small paper slips and collected in a box. In this type, each subscriber has to create an online account through which he/she can manage and circulate chit funds. The subscribers can make their monthly contributions online and also receive their prize money through online modes.
These types of chit funds have online auctions. This type of chit funds is considered riskier than registered chit funds. The RBI regulates these types of chit funds with Chit Funds Act, 1982 that is enforced across states in India.
