Snehabindu Chits was incorporated in October 2021 under the Companies Act, primarily regulated by the Central Chit Fund Act and the rules set by the Karnataka Government. Before starting a new chit group, approval from the Government is required. An agreement with the Registrar of Chits in Karnataka is also mandatory for member safety. The foreman must deposit 100% of the chit value with the Registrar before starting the chit group, and a bid cap of 40% is imposed to prevent uncontrollable bidding. The minimum bid is set at 5% of the chit value, which is the foreman’s commission.