Professional Documents
Culture Documents
OF
Submitted in:
Submitted By:
I am sincerely thankful to all the staffs in KSFE – Palakkad Main Branch under
whose guidance I have successfully completed this project and the time spend with
all has been a great learning experience. I thank all for the constant
encouragement, warm response and for filling every gap with valuable ideas that
has made this project successful.
I would also give special thank to my father and my friends for their support,
information, co-operation, advice to complete my project.
T A Radhika
M.Com 3rd Semester
VLB Janakiammal College
Coimbatore
INDUSTRY : FINANCE
CHAPTER 2: PROFILES……………………………………………..7
HISTORY OF THE COMPANY
GROWTH PATH
RECENT DEVELOPMENTS
PRESENT SCENARIO
VISION OF THE COMPANY
CHAPTER 5: CONCLUTION………………………………………. 46
FINDINGS
SUGGESSIONS
SWOT ANALYSIS
CONCLUSION
DECLARATION
INTRODUCTION
The project was conducted in KSFE, Palakkad, keeping the following objectives in
view:
The following bulletin points will describe the important “SCOPE” of the project
conducted:
The data for this project is collected from internet and from KSFE,
Palakkad Main Branch.
The reader of this project can understand about the Financial Products in
Kerala. Mainly about CHITTY FINANCE concept in Kerala.
To understand and to describe about the working of a financial company.
Through this project we can know the growth of the company and the
present scenario of KSFE and the Financial Market in Kerala.
PROFILES
During the year 1967 Government of Kerala took a policy decision to the effect
that Chitties / Kuries should be conducted under State auspices. The then Finance
Minister in his budget speech for financial year 1967-68 made the following
announcement on the floor of the Assembly:
“I view this decision as a bold step forward along the path towards socialism,
aimed at bringing banks and other financial institutions under social
control”.
The Chitty/Kuri business being what it is, there existed ample scope for
exploitation of the ignorance, indifference and gullibility of the needy people by
unscrupulous promoters, who organized financial institutions in the name of
chitty/kuri fund in order to mobilize fluid resources in their own interest and
appropriate for themselves substantial profit accrued out of such organizations.
Government wanted to introduce a check on the unbridled growth of such financial
institutions with a view to safeguard the interest of the general public and at the
same time to channelise the savings so consolidated for productive purposes. With
these objectives, Government appointed a Special Officer in the year 1967 to
prepare a comprehensive scheme for starting chitties and kuries under Government
control. The Special Officer presented his report on 7th October 1967 analyzing all
aspects involved in the proposal and recommending strongly the entry of
Government in the field of chitties and kuries. Though the recommendation was
for conducting the business as an adjunct of the Registration Department,
Government, however, took a different view and decided to bring within the
purview of Government control not only chitties/kuries but also some other
financial transactions for which socialsation was felt necessary. Hire purchase
The Kerala State Financial Enterprises Limited is fully owned by the Government
of Kerala and is the first Public Sector Company to conduct chit business in the
whole of India. It was incorporated on 6th November 1969 with its registered office
at Trichur. It has an authorized capital of Rs.25 lakhs divided into 25,000 equity
shares of Rs.100 each and a paid up capital of Rs.2 lakhs as initial contribution
from Government of Kerala. The share capital contribution of Government was
progressively increased from Rs.2 lakhs to Rs.7 lakhs in the year 1970-71, to
Rs.12 lakhs in the year 1971-72, to Rs.15.5 lakhs in the year 1972-73, to Rs.20.5
lakhs in the year 1973-74, to Rs.27 lakhs in the year 1974-75, to Rs.28 lakhs in the
year 1977-78 and to Rs.38 lakhs in the year 1987-88. The authorized capital was
raised to Rs.50 lakhs in the year 1974-75 and to Rs.100 lakhs in the year 1989-90.
General Body representing the shareholders shall be the supreme governing body
of the Company.
The objectives of the company are listed in the Memorandum of Association of the
company. The important objects are as follows:
(a) To start, conduct, promote, manage and carry on the business of chitties
in India or elsewhere.
(b) To promote, undertake, organize, conduct, manage and carry on the
business of general and miscellaneous insurance of any kind in India or
elsewhere.
To start, promote, conduct, operate, carry on and manage the business of dealers,
agents and traders under hire purchase system of articles, vehicles, machinery,
materials goods and tools, of all capital goods and consumer goods and property of
all nature and description for personal, domestic, office, commercial, industrial
and community use and consumption as a business of the Company or as agents of
the Government, State or Central or any body or organization there under or of any
other Company. Besides these objects, there are many other objects, which is
incidental or ancillary to the main objects such as to advance, deposit with or lend
money, securities, property or to receive loans or grants or concession of any
nature or deposits from Banks, Government or Governmental organizations or
others.
10 Project Submitted by _______________
VISION OF THE COMPANY
The government is taking appreciable steps to widen the business activity of KSFE
and to reach every category of people. The future plans of the company include the
following:-
PRODUCTS PROFILE
LINE OF PRODUCTS
CHITTY – THE PILLAR PRODUCT OF KSFE
BRIEF ABOUT OTHER PRODUCTS
Chitty
Chitty Loan
Consumer/Vehicle Loan
Gold Loan
Passbook Loan
Trade Finance
Housing Finance
Sugama Deposit
Fixed Deposit
Car Loan
Deposit-in-Trust Scheme
What is a Chitty?
A chitty is basically a contract between the foreman and the Subscribers. As per
the contract, each subscriber agrees to remit a fixed amount of money every month
for a number of months.
The number of tickets enrolling in a chitty will be equal to the number of months
for which the remittance have to be made or the duration of chitty in months.
The total of the periodic subscription, called the chitty amount, will be given out as
“prize money” to the person who bids by allowing for the maximum reduction in
the prize money.
Thus each subscriber gets an opportunity to receive the prize money once during
the tenure of the chitty. All the promoters have to contribute the periodic
subscription till the end of the chitty.
Foreman’s Commission
The foreman is entitled to a certain percentage of the chitty amount (not more than
5% of the chitty amount) as his commission from each member.
Maximum number of tickets one can subscribe is limited to 10% of the total
number of tickets of that chitty, subject to approval by Foreman.
Services rendered.
The Company has appointed daily door collection agent who will come and collect
the amount towards monthly installment daily from a subscriber’s office/
residence. Customer can remit the chitty installment in any of the Branches of
KSFE.
A person can enroll in a chitty either by visiting the Branch or through the agents
of KSFE. You may either click the feed-back or directly ring to any one of the
Branches which is nearer to your location. For finding the list of Branches you
may go to the menu (BRANCHES)
A subscriber can participate in the auction, which will be conducted in the Branch
where the chitty pertains to, either in person or through proxy.
The types of security acceptable for chitty prize money payment, belong to various
categories like personal sureties (of employees of Government, aided schools,
public undertakings, banks etc.), financial documents (like fixed deposits with
banks and reputed organizations, Deposit-in-Trust, LIC policies, bank guarantees,
National Savings Certificates etc.), Sugama Security, landed property or Gold
ornaments.
Liability waiver
The installment per month for chitties range from Rs. 500 to Rs. 1, 00,000 and the
usual duration of chitties are 30 months, 40 months, 50 months, 60 months and
100 months.
• PURPOSE:
Chitty is intended to provide a measure of saving for people who aspire to save for
the future by setting apart a portion of their income. Chitty is a unique scheme
where the saving aspect & the advance aspect are blended together.
• DEFAULT INTEREST
9% on Non-prized default & 14% on prized default on the subscription amount
• SUBSTITUTION
A non-prized default subscriber, after serving a removal notice, may be removed
from subscribers registered & another person may be substituted in his place.
Substitution is allowed only upto 60% of the duration of Chitty. If cheque
remittance is made for substitution, the benefits of the substitution can be enjoyed
only after the cheque is realized.
In the event of non- substitution by other parties or after 60% of duration of Chitty,
Company can substitute default tickets in its favour & auction them for Re.1/-If
there is no eligible subscriber to be prized. In the event of death of the Subscriber
non-prized as well as prized tickets can be substituted by the nominee & he will be
entitled to all the rights under the chitty as if he was the original subscriber.
• PURPOSE:
Through an advance aspect is built into the chitty scheme. It cannot be denied that
a subscriber will have to wait for some time to avail of the benefit of getting the
ticket prized NCL is introduced to bridge the gap between the real need of the
subscribers & the uncertain point of time in future, when the ticket gets prized.
• LIMIT:
a) Loan amount is limited to a maximum of 50% of the chitty sala (per ticket),
rounded off to the lower Rs.100/-
b) Number of loans alive at a time:
A subscriber should not have more than four live loans at a time in the company;
the total of which should not exceed Rs.5 Lakhs.
• ELIGIBILITY:
a. Every non-prized subscriber of chitties will be eligible for availing new chitty
loan upto 50% of sala after remittance of 10% of the total installments, provided
the remittance are upto date.
b. The system of allowing NCL after the 1st auction of the chitty is permitted to
the following cases only subject to a max of Rs 50,000
i. Where the applicant for NCL is an employee acceptable to the company
as surety.
• INTEREST RATE
The interest rate of the advance is 14.5% (simple) and for defaulted accounts
16.5%.
• PURPOSE:
To provide quick loan to non-prized subscribers to meet the urgent needs on the
security of paid up subscriptions in the chitties.
• ELIGIBILITY:
Chitty subscribers who have made up-to-date remittance in unencumbered chitties
are eligible. Applicant should not be defaulter in any of our schemes as principal
debtor or surety/guarantor.
• INTEREST RATE:
Interest is charged at 13% monthly compounding on the loan This will be
applicable to a loanee who remits his/her chitty monthly installments on or before
the due date. In case of default in chitty installments the interests the interest rate
will be 15% monthly compounding.
• REPAYMENT OF LOAN:
The loan and interest due thereon can be settled at any time by remitting the total
dues in lump. To charge interest only for the exact outstanding loan amount after
adjusting the part remittance on the same day itself and only for the days in debt
• PAYMENT OF INTEREST:
The loanee can make periodical interest payment and lump sum interest payment
as well. The practice of treating fraction of a month as full month is discontinued
and interest will be charged only for the exact number of days.
• AGREEMENT:
Chitty loan agreement is executed on stamp paper of value of Rs. 50/-.
• PURPOSE:
The scheme is intended to provide short term loans for people who are urgently in
need of money, on the security of gold ornaments. Gold coins and bullion will not
be accepted as security.
• APPLICATION:
Application form will be supplied free of cost.
• LIMIT OF LOAN:
Maximum loan amount in this scheme is limited to Rs. 1, 00,000 per individual
per day. To insure the identity of the customer copy of documents like Electoral
card, Passport, Driving license or introduction of any KSFE Employ or Gazette
Officer, MPs, MLA’s etc. Customer known to unit head may be obtained and
identified.
• ELIGIBILITY:
The maximum amount that can be granted per gm of 22carat gold jewellery at any
point of time is limited to 70% of the prevailing market price rounded off to the
lower rupees ten, provided the principle plus interest should not exceed 75% of the
market value at any point of time during the loan period. The prevailing market
price of gold listed in any leading newspaper on the date of gold loan is to be
recorded in the loan application by the concerned J.E. and it is to be certified by
• APPOINTMENT OF APPRAISER:
The branch manager concerned may select suitable person who has sufficient
experience in appraising gold ornaments as appraisers for the branch with the
approval of the Regional Manager concerned. The selected appraisers have to take
a fidelity insurance policy for a sum of Rs.5000/-
The appraiser should have the following essential qualifications.
(i) Should know Malayalam (both reading and writing).
(ii) Should have engaged in the manufacture of gold ornaments & must
have sound knowledge and experience of goldsmith work.
(iii) Should have completed 25yrs of age and should not have completed 6
65yrs as on the date of engagement.
(iv) Should hold goldsmith certificate issued by Central Excise Authority.
• PERIOD OF LOAN :
Maximum period of loan is 6 months.
• INTEREST:
Up to 5,000 - 12%
5,001-25,000 - 13%
Above 25,000 - 14%
• PART PAYMENT:
Part payment towards the loan is accepted at any time provided the interest till the
date of remittance is paid in full and remittance towards principal is made in
hundreds or its multiples.
• DOCUMENTATION:
Loanees stamped receipt, promissory note etc., are the documents for payment of
gold loan.
B. FIXED DEPOSIT
• PURPOSE:
This scheme aims at raising fund for financing our schemes, paying attractive
interest rates.
• LIMIT:
Rs .500/- or above.
• PERIOD RATE
For 1year and above but not exceeding60 months 9.75%
• PAYMENT OF INTEREST:
Interest will be paid monthly for deposits of Rs.10, 000/- and above. The interest
will also be transferred to the depositors Sugama Account, chitty or loan account
as per request.
• PREMATURE CLOSURE:
(a) Period of deposit less than one month - Nil
(b) Period of deposit one month and above but less than one year –Sugama rate of
interest.
• OTHER FEATURES:
Deposits can be in the name of individuals, joint names of two or more persons,
firms and companies.
a) The deposit receipts issued by the company are not transferable.
b) The deposit receipts can be pledged as security for chitty payment and for
availing loans under various schemes of company.
c) Nomination facility is also available.
• APPLICATION:
Application is issued free of cost.
• ELIGIBILITY:
Normally the FD on which the loan is intended to be availed must be free of any
liability. Only 1 FD loan account can exist against a deposit at any one time.
• PERIOD OF LOAN:
The period of loan can go up to the maturity date of the FD on which the loan is
availed.
• RATE OF INTEREST:
The interest chargeable on a FD loan is 2% above the rate applicable to the FD on
which such loan is granted.
• PURPOSE:
Sugama deposit scheme aims at providing a deposit facility similar in many ways
to SB accounts in bank but without the cheque facility. The scheme helps the
customers in the following manner.
a. The customers can give standing instructions to the company to transfer
the monthly installments towards chitty on the due dates from the Sugama
account.
b. Interest on FD can be transferred to this account as and when it becomes
due on the basis of standing instructions obtained from the depositors.
• ELIGIBILITY:
The person who intends to open the account should be introduced by a customer or
respected person known to the co., A Sugama account can be opened.
a. By a person in his own name.
b. On behalf of any minor relative.
• INTEREST RATE:
5% on the minimum balance maintained in the account between 6th and the last
day of any month. The interest will be credited twice in a year, on 30th Sep and
31 Mar.
• MODE OF DEPOSIT:
Remittance of amount for the credit of the account should be made in cash at the
branch office concerned or by way of transfer credit of any amount not exceeding
Rs.20000/- due to the depositor, on request; a subscriber is permitted to transfer
the chitty prize money in full to a sugama account.
• WITHDRAWAL:
Withdrawal from the account shall be made through withdrawal slips supplied by
the co., According to the income tax rule, deposit above Rs.20000/- shall be
refunded only by crossed cheques; this limit being applicable to the total
withdrawal of the day.
• LIMIT:
The maximum amount of loan is Rs.25000/-. But in the case of single surety,
offered by an unemployed customer, the maximum loan liability is limited to Rs.
20000/-.
• ELIGIBILITY:
All the customers of KSFE can be considered for the RCL.
a. He/She should have been a customer of the branch in which he/she is
applying for the finance, continuously for a minimum period of 12 months.
b. He/She should not be a defaulter at the time of applying for the loan.
c. He/She should not have committed default for more than 3months during
past 1year.
• PERIOD OF LOAN:
The minimum and maximum period of the loan is 12months and 36 months
respectively.
• RATE OF INTEREST:
Interest will be charged at 14% yearly diminishing basis.
• REPAYMENT OF LOAN:
The loan together with interest shall be repaid in monthly installment as per the
EMI table.
30 Project Submitted by _______________
• PENAL INTEREST:
Penal interest of 2% for each month of default on the defaulted installments
amount will be charged.
• PREMATURE CLOSURE:
For premature closure re-calculation of EMI up to the month of closure is made
minimum one year’s interest is taken.
WORKING OF A BRANCH
ORGANIZATION CHART
DUTIES AND RESPONSIBILITY
WORKS DONE IN THE BRANCH
PROCEEDURE OF ACCOUNTING THE DATAS
He will be responsible for the environment with in the Units in which his
subordinates work and will create conditions conducive to effective work;
To prepare a master plan outlining the proposed activities with the objectives to
be attained in accordance with the policies of the organization and forward it to
the Head Office during February each year to enable the Company to prepare a
realistic budget every year. In addition to the implied duties he will have the
following specific functions;
(e) To control them by measuring and correcting their activities to assure that
events conform to plans and to co-ordinate their work.
1. OFFICE HOURS
The Office hours for regular employees are from 10 a.m to 5 p.m on all working
days except in the case of Evening Branches. The office hours prescribed for
Evening Branches are from1p.m to7 p.m. In the case of part time employees; it is
fixed from 8 a.m. to 1 p.m. in regular Branches and from 11 a.m to 4 p.m. in
Evening Branches.
2. LUNCH BREAK
45 minutes interval is allowed for lunch break and this has been fixed between 2
p.m and 3 p.m
3. PUNCTUALITY IN ATTENDANCE
All members of the staff are expected to observe punctuality in attendance.
Habitual late attendance and other irregularities connected with attendance are
punishable under the provisions of the Standing Orders of the Company.
Any employee found absent from his seat during office hours for a duration
exceeding five minutes except with the permission of the authorised officer will be
called upon to explain his absence and if this habit persists, disciplinary action will
be taken against such employee who is found guilty.
4. HOLIDAYS
All holidays declared by the Government of Kerala as holidays for its employees
will be holidays for the company also, unless declared to be restricted to specific
department in which the Company is not included.
In addition to the above, the local holidays either whole or part declared by
Government are also available to Company employees of the respective locality.
At the beginning of every year, a list will be drawn up and released showing the
public holidays on the basis of the public holidays declared by the Government. In
40 Project Submitted by _______________
addition to the holidays fixed for each year all Sundays and Second Saturdays will
be holidays for the Company.
Tally is used in KSFE Branches for accounting purposes and Excel is used for
creating of schedules, reports, daily fund flow summary etc.
CONCLUTION
DECLARATION
The journey of KSFE started slowly and in a small scale basis. But not KSFE have
a largest role in the financial market in Kerala.
KSFE stands outstanding with its unique and secured products type and range
when comparing with the other financial institutes in Kerala. The products of
KSFE is a risk free safe haven for the public as KSFE conducts only chitties fully
governed by the provisions of Kerala Chitties Act, 1975. Because of the same
reason and the quality of the service towards Customer Satisfaction and the
products offered KSFE has got a place on the list of trusted Companies in
everyone’s mind.
PLACE : PALAKKAD
DATE : 25th June, 2009