You are on page 1of 16

ISTORY OF THECOMPANY During the year 1967 Government of Kerala took a policy decision to the effectthat Chitties / Kuries

should be conducted under State auspices. The then FinanceMinister in his budget speech for financial year 1967-68 made the followingannouncement 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 socialcontrol. The Chitty/Kuri business being what it is, there existed ample scope forexploitation of the ignorance, indifference and gullibility of the needy people byunscrupulous promoters, who organized financial institutions in the name of chitty/kuri fund in order to mobilize fluid resources in their own interest andappropriate for themselves substantial profit accrued out of such organizations.Government wanted to introduce a check on the unbridled growth of such financialinstitutions with a view to safeguard the interest of the general public and at thesame time to channelise the savings so consolidated for productive purposes. Withthese objectives, Government appointed a Special Officer in the year 1967 toprepare a comprehensive scheme for starting chitties and kuries under Governmentcontrol. The Special Officer presented his report on 7th October 1967 analyzing allaspects involved in the proposal and recommending strongly the entry of Government in the field of chitties and kuries. Though the recommendation wasfor conducting the business as an adjunct of the Registration Department,Government, however, took a different view and decided to bring within thepurview of Government control not only chitties/kuries but also some otherfinancial transactions for which socialsation was felt necessary. Hire purchase inancing and insurance were the new areas suggested for inclusion within theambit of the proposed organization.Accordingly, Government decided to organize a public sector undertaking with thename The Kerala State Financial Enterprises Limited for the purpose of conducting Chitty, Hire Purchase and Insurance business under Governmentcontrol.The Kerala State Financial Enterprises Limited is fully owned by the Governmentof Kerala and is the first Public Sector Company to conduct chit business in thewhole of India. It was incorporated on 6 th November 1969 with its registered officeat Trichur. It has an authorized capital of Rs.25 lakhs divided into 25,000 equityshares of Rs.100 each and a paid up capital of Rs.2 lakhs as initial contributionfrom Government of Kerala. The share capital contribution of Government wasprogressively increased from Rs.2 lakhs to Rs.7 lakhs in the year 1970-71, toRs.12 lakhs in the year 1971-72, to Rs.15.5 lakhs in the year 1972-73, to Rs.20.5lakhs in the year 1973-74, to Rs.27 lakhs in the year 1974-75, to Rs.28 lakhs in theyear 1977-78 and to Rs.38 lakhs in the year 1987-88. The authorized capital wasraised to Rs.50 lakhs in the year 1974-75 and to Rs.100 lakhs in the year 1989-90.The Management of the company is vested in the Board of Directors constitutedby Governor from time to time. The number of Directors shall not be less than 2and shall not be more than 9. The maximum number has been subsequently raisedto 15. The Directors shall hold office during the pleasure of the Governor. TheGovernor may, from time to time, appoint 2 Directors other than the ManagingDirector as Chairman and Vice Chairman of the Board. The first Board wasconstituted as per Government Order No.G.O. (RT) 4876/69/Fin. Dated 26thNovember 1969 and they assumed charge on 28 th November 1969. The Managing Director is appointed by the Governor on such terms and remuneration as he maythink fit from among the Directors for the conduct and Management of thebusiness of the company subject to

the control and supervision of the Board of Directors.General Body representing the shareholders shall be the supreme governing bodyof the Company. OBJECTIVES OF THE COMPANY The objectives of the company are listed in the Memorandum of Association of thecompany. The important objects are as follows: (a) To start, conduct, promote, manage and carry on the business of chittiesin India or elsewhere.(b) To promote, undertake, organize, conduct, manage and carry on thebusiness of general and miscellaneous insurance of any kind in India orelsewhere. 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, industrialand 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 anyother Company. Besides these objects, there are many other objects, which isincidental or ancillary to the main objects such as to advance, deposit with or lendmoney, securities, property or to receive loans or grants or concession of anynature or deposits from Banks, Government or Governmental organizations orothers ISION OF THE COMPANY The vision of Kerala State Financial Enterprises is to become a significant playerin the financial services sector by:-

Providing a whole range of quality services and products.

Adopting technology and benchmark standards in customer service andperformance.

Spreading our wings beyond the borders of Kerala, on a global level.

Retaining the pre-eminent role in Chitty business.

Continuing focus on extending resources to the Govt. of Kerala.

Sustaining commitment to the weaker sections of society, as theneighborhood institution for support, trust and security. FUTURE PLANS OF THE COMPANY The government is taking appreciable steps to widen the business activity of KSFEand to reach every category of people. The future plans of the company include thefollowing:-

Making KSFE a fully computerized Company

Opening more and more new branches, including chitty units to establish itspresence in all major centers and backward areas, aiming at effective ruralpenetration.

Introducing value additions in chitty schemes - for coping with the fiercecompetition in the financial market, for more popularity and widening ourcustomer base.

Acting as the collection agent for KSEB, KWA, etc., throughout the state.

To construct a multi-storied building in KSFE's own premises in Kakkanad,Cochin and to house among others a Staff Training College for itself.

Introduction of new schemes like, Educational Loan, Agricultural Overdraftand Cumulative Deposit Scheme.

Expanding its door collection facility to loan accounts and deposit schemessuitably, this is expected to create considerable employment opportunities aspart of its social objective.

Introduction of chitties with simultaneous draw and auction which can beoffered as an incentive to regular customers for whom it will be a greatattraction, particularly for those with saving attitude.

Introduction of Daily/Weekly draw/auction chitties, which is expected tohave a wide scope among traders, will raise the Company's market shareconsiderably.

Enter the arena of Credit/Debit Card business - immediately after branchnetworking the Company plans to launch the 'Debit Card' business.

Starting of Virtual Branch through net worked computer systems for thebenefit of NRIs particularly Malayalees in the Gulf & other countries is onthe anvil. This will obviate the need for "brick and mortar branches" andwill enable customers who have internet access, to transact with theCompany through virtual branches. LINE OF PRODUCTS

Chitty

Chitty Loan

Consumer/Vehicle Loan

Reliable Customer Loan

Gold Loan

Passbook Loan

Trade Finance

Housing Finance

Sugama Deposit

Fixed Deposit

Car Loan

Flexy Trade Loan

Sugama Security Scheme

Deposit-in-Trust Scheme

Safe Deposit Locker

Tax Planning Loan Scheme

Western Union Money Transfer CHITTY THE PILLAR PRODUCT OF KSFE

Chitty is a unique scheme incorporating the aspects of a recurring deposit and anadvance scheme. In chitty, the subscriber has an opportunity to bid and avail of advance which amounts to a certain percentage of the total denomination of thechitty (sala), whereas in recurring deposit the advance can be availed only on thepaid up amount. In case bidding is delayed due to draw of lots in the initialinstallments, one can resort to availing of chitty loan, which is a loan that"bridges" the gap between the need of the subscriber for money and the delay inthe chitty getting prized. BASIC INFO ABOUT CHITTYWho Conducts a Chitty? A Chitty is conducted by a person or an institution and this entity is called theforeman. In the case of KSFE Chitties, KSFE is the foreman. What is a Chitty? A chitty is basically a contract between the foreman and the Subscribers. As perthe contract, each subscriber agrees to remit a fixed amount of money every monthfor a number of months. How many tickets can be enrolled in each chitty? The number of tickets enrolling in a chitty will be equal to the number of monthsfor which the remittance have to be made or the duration of chitty in months. What is Chitty Prize Money? The total of the periodic subscription, called the chitty amount, will be given out asprize money to the person who bids by allowing for the maximum reduction inthe prize money. The maximum reduction possible is 25% as per the prevailing Chitty Act and if there is more than one subscriber interested in bidding at 25% reduction, thenumbers of the such bidders will be put to a draw.Thus each subscriber gets an opportunity to receive the prize money once duringthe tenure of the chitty. All the promoters have to contribute the periodicsubscription till the end of the chitty. Foremans Commission The foreman is entitled to a certain percentage of the chitty amount (not more than5% of the chitty amount) as his commission from each member. How many tickets can one subscribe in a single chitty? Maximum number of tickets one can subscribe is limited to 10% of the totalnumber of tickets of that chitty, subject to approval by Foreman. Services rendered. The Company has appointed daily door collection agent who will come and collectthe amount towards monthly installment daily from a subscribers office/ residence. Customer can remit the chitty installment in any of the Branches of KSFE. How can one enroll in a chitty? A person can enroll in a chitty either by visiting the Branch or through the agentsof KSFE. You may either click the feed-back or directly ring to any one of theBranches which is nearer to your location. For finding the list of Branches youmay go to the menu (BRANCHES) Participation in the auction A subscriber can participate in the auction, which will be conducted in the Branchwhere the chitty pertains to, either in person or through proxy. What are the Securities Acceptable for Payment of Prize Money? The types of security acceptable for chitty prize money payment, belong to variouscategories like personal sureties (of employees of Government, aided schools,public undertakings, banks etc.), financial documents (like fixed deposits withbanks and reputed organizations, Deposit-in-Trust, LIC policies, bank guarantees,National Savings Certificates etc.), Sugama Security, landed property or Goldornaments. Liability waiver

In case of unfortunate death of the subscriber the future liability subject to amaximum of Rs.1 Lakh will be written off subject to certain conditions. CHITTY FINANCE - PROCEEDURE The installment per month for chitties range from Rs. 500 to Rs. 1, 00,000 and theusual duration of chitties are 30 months, 40 months, 50 months, 60 months and100 months. PURPOSE: Chitty is intended to provide a measure of saving for people who aspire to save forthe future by setting apart a portion of their income. Chitty is a unique schemewhere the saving aspect & the advance aspect are blended together. ELIGIBILITY: Any Indian citizen who has attained majority can subscribe in Chitties. Enrolmentin joint names is not allowed. In the case of Non-Resident Indians, condition of RBI, if any, have to be observed. A subscriber cannot hold more than 10% of thetotal tickets in chitty. The existing rules regarding Chitty canvassing agents standrevised with effect from 1.5.1999(see circular 64/99) MONETERY RANGE & DURATION OF CHITTIES Sala of our chitties range upto 10lakhs with monthly subscriptions of Rs.25000/-.Branches are permitted to start short duration chitties below 40 months with theconsent of Regional Manager concerned. Similarly to start chitties with a salaexceeding 5 lakhs prior Head Office permission should be obtained. 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 removedfrom subscribers registered & another person may be substituted in his place.Substitution is allowed only upto 60% of the duration of Chitty. If chequeremittance is made for substitution, the benefits of the substitution can be enjoyedonly 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 Subscribernonprized as well as prized tickets can be substituted by the nominee & he will beentitled to all the rights under the chitty as if he was the original subscriber. NEW CHITTY LOAN PURPOSE: Through an advance aspect is built into the chitty scheme. It cannot be denied thata subscriber will have to wait for some time to avail of the benefit of getting theticket prized NCL is

introduced to bridge the gap between the real need of thesubscribers & the uncertain point of time in future, when the ticket gets prized. REGISTRATION CHARGE: RS.10/ 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 chittyloan upto 50% of sala after remittance of 10% of the total installments, providedthe remittance are upto date.b. The system of allowing NCL after the 1st auction of the chitty is permitted tothe following cases only subject to a max of Rs 50,000i. Where the applicant for NCL is an employee acceptable to the companyas surety.ii. When financial documents viz., FD Receipts, Bank Guarantee, LICPolicies, NSCs, KVPs, etc., are offered security. iii. Where the applicant for NCL is a professional/Businessman having ataxable annual income of Rs 1 Lakh and above(to prove the income,applicant has to produce last 3 yrs income tax returns)iv. Where the applicant, whether employed or not, offers personal suretiesas security, provided one of the sureties offered belongs to the SREG(Salary Recovery Enforceable Group)c. Subscribers in chitties with sala of more than Rs 1 Lakh can apply a second timefor NCL upto 50% of the sala, on remittance of 10% of installments which havebecome due for remittance.i. He should be upto date and prompt in the payment of the concerned NCLinterest and corresponding chitty installments.ii. Outstanding dues if any, against the existing NCL account should becleared either by direct remittance or by adjustment from the fresh NCLamount to be sanctionedd. Where the installment amount with interest is 5000/- and above, the unit headshould ensure the repaying capacity of the loanee and make a note of it forsanctioning the loan.e. Loan should not be sanctioned to a loanee whose previous loan account is indefault. INTEREST RATE The interest rate of the advance is 14.5% (simple) and for defaulted accounts16.5%. PASS BOOK LOAN: PURPOSE: To provide quick loan to non-prized subscribers to meet the urgent needs on thesecurity of paid up subscriptions in the chitties. LIMIT:

As per chart prescribed, based on the paid up amount in the chitty and the periodremaining for termination of the chitty. Gross subscription remitted reduced byFormans Commission and debit balance is the paid up amount. Loan is roundedto the lower Rs.100/- of eligible amount. ELIGIBILITY: Chitty subscribers who have made up-to-date remittance in unencumbered chittiesare eligible. Applicant should not be defaulter in any of our schemes as principaldebtor or surety/guarantor. INTEREST RATE: Interest is charged at 13% monthly compounding on the loan This will beapplicable to a loanee who remits his/her chitty monthly installments on or beforethe due date. In case of default in chitty installments the interests the interest ratewill be 15% monthly compounding. AUCTION OF THE CHITTY: The chitty can be allowed to be auctioned subject to the limit of 30% if the prizeamount will be adequate to cover the future liability in his chitty, the loan amountand interest thereon. Prior written permission from the Unit Head to auction thechitty should be obtained. REPAYMENT OF LOAN: The loan and interest due thereon can be settled at any time by remitting the totaldues in lump. To charge interest only for the exact outstanding loan amount afteradjusting the part remittance on the same day itself and only for the days in debt provided such remittances are not less than 10% of the outstanding balance as onthe date of remittance. PAYMENT OF INTEREST: The loanee can make periodical interest payment and lump sum interest paymentas well. The practice of treating fraction of a month as full month is discontinuedand interest will be charged only for the exact number of days. WHEN CHITTY IS DEFAULTED: When chitty installments are defaulted the subscriber is removed observing theusual procedures and the loan and interest thereon are adjusted from the RSC orAPSTC as the case may be. AGREEMENT: Chitty loan agreement is executed on stamp paper of value of Rs. 50/-. BOND PREPARATION CHARGE:

Bond preparation charge is 0.2% of loan amount at minimum Rs.10/- andminimum Rs.60/RIEF ABOUT OTHER MAJOR PRODUCTSA. GOLD LOAN SCHEME: The gold loan scheme was launched by the company on 16th Oct 1989. Under thescheme, short term loans upto Rs. 20,000/- for a maximum period of 12months areprovided on the security of gold ornaments. PURPOSE: The scheme is intended to provide short term loans for people who are urgently inneed of money, on the security of gold ornaments. Gold coins and bullion will notbe 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 individualper day. To insure the identity of the customer copy of documents like Electoralcard, Passport, Driving license or introduction of any KSFE Employ or GazetteOfficer, MPs, MLAs etc. Customer known to unit head may be obtained andidentified. ELIGIBILITY: The maximum amount that can be granted per gm of 22carat gold jewellery at anypoint of time is limited to 70% of the prevailing market price rounded off to thelower rupees ten, provided the principle plus interest should not exceed 75% of themarket value at any point of time during the loan period. The prevailing marketprice of gold listed in any leading newspaper on the date of gold loan is to berecorded in the loan application by the concerned J.E. and it is to be certified by the unit head. The same should also be noted in the personal ledger folio. If themarket price of gold in various towns within the state differs from one another, thelowest prize quoted may be taken as the base for fixing the eligible loan amountper grams. APPOINTMENT OF APPRAISER: The branch manager concerned may select suitable person who has sufficientexperience in appraising gold ornaments as appraisers for the branch with theapproval of the Regional Manager concerned. The selected appraisers have to takea 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 & musthave sound knowledge and experience of goldsmith work.(iii) Should have completed 25yrs of age and should not have completed 665yrs 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.

OVER DUE GOLD LOAN: The unit heads should send notices demanding the remittance of up-to-date interestwithin 15days from the date of notice. If the loanee, in response to our notice,remits at least the interest due for 6 months within the stipulated time, his accountcan be kept live for the period remaining to cover the maximum period of 12months If the loanee fails to remit the interest as demanded by the company with in thestipulated time, the unit heads should initiate immediate steps for the auction saleof pledged gold ornaments after fulfilling the usual formalities. The maximumperiod for repayment of gold loan is 1year and even in cases where the loanee hasremitted interest for the first 6months, the account has to got closed immediatelyafter the completion of 12months. 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 thedate of remittance is paid in full and remittance towards principal is made inhundreds 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 attractiveinterest rates. LIMIT: Rs .500/- or above INTEREST RATE :Simple interest will be paid as fixed by the company from time to time. The rate of interest on fresh fixed deposit as well as for renewal of existing deposits acceptedfrom public is; PERIOD RATE For 1year and above but not exceeding60 months 9.75% FIXED DEPOSITS GENERATED FROM PRIZE MONEYCHITTIES: Fixed deposits created from prize money of chitties and offered as securitytowards the future liabilities irrespective of the duration of the chitties andquantum of future liabilities.a. Should be deposited in full without any deduction.b. Subscribers who avail this facility should open a Sugama

account inhis/her name.c. Should be a single deposit, initially. It can be split up into 2 or moredeposits for different period on the depositors request, when it becomesrenewable, provided the subscriber is up to date in remittance. PAYMENT OF INTEREST: Interest will be paid monthly for deposits of Rs.10, 000/- and above. The interestwill also be transferred to the depositors Sugama Account, chitty or loan accountas 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. RENEWAL: Fixed Deposits can be renewed with retrospective effect. When F.D. is renewedon a later date interest will be given from the maturity date of the original depositprovided the deposit is renewed for a minimum period of one year from thematurity date of the original deposit. The rate of interest will be the rate applicableon the date of maturity of the original deposit. LOAN FACILITY ON ENCUMBERED F.D: (a) Only one FD Loan account can exist against a deposit at any one time.So the depositor can draw a second loan on FD, equal to 75% of the depositor the amount he requires, whichever is lower, as a new loan after closingthe existing loan on FD.(c) A loan on the same FD can be allowed for an amount not exceeding 75%of the unencumbered portion. 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 foravailing loans under various schemes of company.c) Nomination facility is also available. C. LOAN ON FIXED DEPOSIT: PURPOSE :The loan is intended to provide quick loan to depositors on their Fixed Deposits. APPLICATION: Application is issued free of cost LIMIT: 75% of the F.D amount is paid as loan. The Regional Managers are authorized toconsider individual cases on merit for FD loan above this limit of 75% subject to amaximum of 90% of FD amount.

ELIGIBILITY: Normally the FD on which the loan is intended to be availed must be free of anyliability. 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 isavailed. RATE OF INTEREST: The interest chargeable on a FD loan is 2% above the rate applicable to the FD onwhich such loan is granted. D. SUGAMA DEPOSIT SCHEMES: PURPOSE: Sugama deposit scheme aims at providing a deposit facility similar in many waysto SB accounts in bank but without the cheque facility. The scheme helps thecustomers in the following manner.a. The customers can give standing instructions to the company to transferthe monthly installments towards chitty on the due dates from the Sugamaaccount.b. Interest on FD can be transferred to this account as and when it becomesdue on the basis of standing instructions obtained from the depositors. LIMIT: 75% of the F.D amount is paid as loan. The Regional Managers are authorized toconsider individual cases on merit for FD loan above this limit of 75% subject to amaximum of 90% of FD amount. ELIGIBILITY: Normally the FD on which the loan is intended to be availed must be free of anyliability. 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 isavailed. RATE OF INTEREST: The interest chargeable on a FD loan is 2% above the rate applicable to the FD onwhich such loan is granted. D. SUGAMA DEPOSIT SCHEMES: PURPOSE:

Sugama deposit scheme aims at providing a deposit facility similar in many waysto SB accounts in bank but without the cheque facility. The scheme helps thecustomers in the following manner.a. The customers can give standing instructions to the company to transferthe monthly installments towards chitty on the due dates from the Sugamaaccount.b. Interest on FD can be transferred to this account as and when it becomesdue on the basis of standing instructions obtained from the depositors. MINIMUM BALANCE: Minimum balance to be maintained at any time should not be less than Rs.100/-.The minimum balance to be maintained in the Sugama for interest eligibilityshould be Rs.250/- or more. ELIGIBILITY: The person who intends to open the account should be introduced by a customer orrespected 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 lastday of any month. The interest will be credited twice in a year, on 30th Sep and31 Mar. MODE OF DEPOSIT: Remittance of amount for the credit of the account should be made in cash at thebranch office concerned or by way of transfer credit of any amount not exceedingRs.20000/- due to the depositor, on request; a subscriber is permitted to transferthe chitty prize money in full to a sugama account. WITHDRAWAL: Withdrawal from the account shall be made through withdrawal slips supplied bythe co., According to the income tax rule, deposit above Rs.20000/- shall berefunded only by crossed cheques; this limit being applicable to the totalwithdrawal of the day. E. RELIABLE CUSTOMER LOAN (RCL): The scheme is intended to provide easy credit facility to our customers. APPLICATION FORM: On registration by payment of Rs. 10/- application can be obtained from the unithe/she intends to take the loan. 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 isapplying 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 duringpast 1year. PERIOD OF LOAN: The minimum and maximum period of the loan is 12months and 36 monthsrespectively. 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 theEMI table PENAL INTEREST: Penal interest of 2% for each month of default on the defaulted installmentsamount will be charged. NUMBER OF LOAN WHICH CAN BE AVAILED UNDER RCL: At any one time, there should be one and only one live RCL in the co., in the nameof a customer. To ensure this the covering abstract should be sent to HO andclearance obtained before issuing the loan. PREMATURE CLOSURE: For premature closure re-calculation of EMI up to the month of closure is mademinimum one years interest is taken.