Section 12(1) in Andhra Pradesh Chit Funds Act, 1971
(1)For the proper conduct of the chit, every foreman shall, before applying for the certificate of commencement under Section 7,(a)execute an indenture of mortgage and trust in favour of the Registrar as trustee charging by way of security property sufficient to the satisfaction of the Registrar for the realisation of the chit amount; or(b)(i)deposit in any approved bank an amount not less than half of the chit amount ; or(ii)invest in Government securities of the face value or market value, whichever is less, of not less than half the chit amount, and transfer the amount so deposited or the Government securities in favour of the Registrar to be held in by him trust as security ;Provided that, where movable property is charged by way of security, only such kind of movable property as may be prescribed shall be so charged and such movable property shall be deposited in such manner and with such person or officer as may be prescribed.
