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Synopsis Chit funds, a peculiar, indigenous, traditional non-banking financial institution of South India, is perhaps the most misunderstood financial system in India. Chit funds have a unique position among the non-banking financial intermediaries. Even in the new millennium of e-commerce and tele-banking, the highly sophisticated financial systems have not in any way lessened the significance of chit funds. It is evident in the fact that the largest chain of chit funds in the state today is managed and profitably run by the government sector. It is a big success both in the public and private sectors because of the great trust people lay on it as a financial institution. This book focuses on the peculiarities, origin and development, and the cost benefit analysis of auction chits. This study is carried out in the perspective of both the subscribers and the chit promoter. The analyses are made in various viewpoints so that subscribers, promoters and policy makers alike can have a proper perspective of the system.