Chitty
  Chitty Loan
  Consumer/Vehicle Loan
  Reliable Customer Loan
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  Trade Finance
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  Securities Acceptable
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 W e l c o m e   t o   K S F E ...........Govt. of Kerala Owned Miscellaneous Non-Banking Company

Securities Acceptable


SECURITIES GENERALLY ACCEPTED BY THE KSFE


The Kerala State Financial Enterprises offers financial assistance under various Schemes. These schemes are listed below:

            New Chitty Loan

            Consumer/Vehicle Loan

            Special Car Loan

            Reliable Customer Loan

             Gold Loan

             Trade Finance

             Flexy Trade Loan

             Housing Finance

             Pass Book Loan

             Fixed Deposit Loan


In addition to the above, the Chitty Scheme, which is the backbone of the Company, has an advance aspect built into it. The payment of prize money in chitties is actually an advance given to the subscriber by the Company.

Advances under all the above mentioned schemes can be made only against security of one type or the other, so as to ensure the repayment of the advance, along with interest. Thus in the context of KSFE advances, or for that matter; in the context of advances by any other institutions, securities can be defined as follows:

"Anything, such as salary recovery undertaking, landed property, deposit receipts, etc., that is deposited or pledged as a guarantee for the fulfillment of an undertaking regarding the repayment of an advance, along with interest thereon, to be forfeited in case of default".

The various types of securities accepted by the KSFE for its different schemes are the following:

                 Personal Security (Not applicable to Flexy Trade Loan and Special Car Loan)

                 Fixed Deposits of KSFE and Other Bank Deposits

                 Short Term Deposits of KSFE

                 Deposit-in-Trust of KSFE

                 L.I.C. Policy

                 Bank Guarantee

                 Pass Book of Non-prized Chitties of KSFE

                  National Savings Certificates VIII Issue

                  Kissan Vikas Patra

                  NRI Deposits

                  Property Security

                  Gold Ornaments

                  Sugama Security

                  Combined Security


Details regarding these securities and an outline of   the documentation involved are given below:

PERSONAL SECURITY
 

Personal security is accepted for future liability upto Rs.10-lakhs. Employees of Central/ State/ Quasi-Government Departments/ Undertakings, employees of Government / Aided schools/ Plus two schools, colleges and employees of Nationalised/ Scheduled Banks and certain Co-operative institutions are generally accepted as sureties by the Company for  its various schemes.  Private practicing professionals having taxable annual incomeof Rs.1 lakhs and below the age of 65-years shall be treated at par with the SRNEG employees. Taxable income means gross income less standard deduction, profession tax and HRA, if applicable. Monthly income will be 1/12th of the taxable income.

1. SALARY AND MINIMUM SALARY

a)      “salary” for this purpose include Basic pay plus D.A. (Dearness Allowance) and adhoc DA/increase and P.P (Personal Pay), if any.


b)     “Minimum Salary"


  Only full-time permanent employees who are drawing a minimum net-salary  of Rs.5000/- will be accepted as sureties/guarantors.

 
2. CLASSIFICATION OF SURETIES

a)      “SREG” (Salary Recovery Enforceable Group)

b)     “SRNEG (Salary Recovery Non-Enforceable Group)

3. Salary Requirement Norms


a)      SREG employees:The SREG surety (s)/guarantor(s) offered should have a minimum/combined salary of 10% of the future liability.

b)   SRNEG employees:

The SRNEG surety(s)/guarantor(s) offered should have a minimum/combined salary of 12.5% of the future liability.

c)       Combination of Sureties/guarantors

When SREG employee and SRNEG employee are jointly offered as sureties/ guarantors they should have a combined minimum salary of 12.5% of the future liability.

4.  General Conditions.

(a)   Sureties should be permanent residents of and working in Kerala State.

(b)  They should be permanent/ officiating full time employees.

(c)  The sureties should have at least  6 months service left for retirement after the termination of  the period of liability.

SELF SURETY


SREG and SRNEG employees who are chitty subscribers/Loanees can avail of the facility of self surety/guarantee, up to a liability of Rs.2,00,000/- in all schemes, with minimum net-salary of Rs.5000/- on the condition that total recovery of the applicant doesnot exceed 60% including the monthly gross instalment amount of the chitty/loan/advance applied for. However for future liability upto Rs.3,00,000/- ,personal surety is accepted on the basis of salary certificate as well as marks as per score card.

SINGLE SURETY

Single surety is accepted in all the schemes:

(a) Upto a liability of Rs. 200,000/- if the principal debtor is unemployed, provided the surety is from SREG with minimum net-salary of Rs.5000/-.on the condition that total recovery of the surety doesnot exceed 60% including the monthly gross instalment of the chitty/loan/advance applied for.

(b) Upto a liability of Rs.500000/-, where the principal debtor is from SREG, provided both the principal debtor and surety have separate minimum net-salary of Rs.5000/-.on the condition that total recovery of the principal debtor doesnot exceed 60% including the monthly gross instalment of the chitty/loan/advance applied for.

 

Other Notable Features related to Surety Norms


The provision to accept professionals on par with SRNEG in case of those having a taxable annual income of Rs.1 lakh and above.

The provision to consider employed couples (including professionals), having a combined taxable annual income of not less than Rs.2 lakhs, as sufficient security for an advance/future liability equal to their annual income, subject to a maximum advance/future liability of Rs.3 lakhs.

The provision to allow conversion of an amount equal to the future liability of the chitty from prize money as Deposit-in-Trust of the company, treating the same as security towards future liability.

I.   FIXED DEPOSIT

Fixed deposits with Nationalised Banks, Scheduled Banks, District Co-operative Banks, Co-operative Banks or any other Banks, having deposit insurance coverage and fixed deposits with KSFE. Ltd., either in the name of the subscriber/applicant or in the name of another person will be accepted as security for all our schemes.

II.  SHORT TERM DEPOSIT

Short Term deposits with KSFE. Ltd., either in the name of the subscriber/applicant or in the name of another person will be accepted as security for all our schemes.

III.   L.I.C POLICY

LIC Policies, the surrender value of which, are equal to the future liability of the loan/chitty can be accepted as security. The LIC policy accepted as security in such cases can be in the name of applicant/subscriber or in the name of spouse or in the name of any other person. In such cases the policy should be assigned in favour of the company and the policy holder should be a co-bounden in the agreement.

IV. BANK GUARANTEE

Government Securities and Bank Guarantee can be accepted as valid security. The Bank Guarantee should cover an amount equal to one instalment more than the future liability. Also it should be valid for a period not less than three months after the termination of the liability.

V.  PASS BOOK OF NON-PRIZED CHITTIES

The Passbook of non-prized chitties can be accepted as security for the future liability of schemes. The paid up gross subscription minus full Foreman’s Commission is the paid up value.

The paid up value should be sufficient to cover the future instalments in the scheme together with interest on the future instalments up to the date of termination of the pledged non-prized chitty.

VI.   NATIONAL SAVINGS CERTIFICATE (VIII ISSUE)

NSC will be accepted as valid security, on the following conditions:

At the time of acceptance, the issue price (face value) of the NSC’s (VIII issue), should cover the future liability, ie. principal plus interest in case of advances and sum total of future instalments in the case of chitties. The interest for the loan amount is to be calculated till the maturity of the instrument or the remaining period of loan, whichever is longer.

Forms prescribed by the Post Office are used for noting the lien.

VII.   KISSAN VIKAS PATRA

The future liability for which Kisan Vikas Patra can be accepted as security is determined as follows:

1.   In case the Kissan Vikas Patra is offered as security before the expiry of 30 months after the issue of the    same, the certificate will be accepted for a future liability not exceeding 75% of the value of the certificate (i.e, purchase price).


2.  If the Kissan Vikas Patra is offered as security after 30 months (i.e, expiry of lock in period) of the issue of the same, the certificate will be accepted as security for future liability worth the premature closure value of the certificate on the date of acceptance of the same as security.

VIII.   N.R.I. DEPOSITS

The NRI, NRO, FCNR and NRNR deposits can be accepted as security to our various schemes, provided.


a)  The deposit receipts are properly discharged and company’s lien noted on it.

b)  The Bank, in which the  deposit is kept, agrees to close it and make required payment to   KSFE. even       before maturity, on demand.

IX.    PROPERTY SECURITY

Property security inside the State of Kerala can be accepted as security, provided the title of the owner over the property is clear. The following documents will have to be presented while submitting property as security.
                       Title Deeds and prior documents in original (for the past 13 years)
                       Encumbrance certificate for the past 13 years
                       Land Tax Receipt for the current year
                       Building Tax Receipt, if there is a building on the property.
                       Possession and enjoyment certificate
                       Location Certificate and Sketch of the property.

X.    GOLD SECURITY

Gold ornaments can be accepted as security towards future liablity in all schemes. 1gm of gold (18carat) will cover a future liability of Rs.1800/-, 1gm of 19 carat & above will cover Rs.2050/-. In exceptional cases & BIS hallmarked gold ornaments will be accepted upto Rs.2150/- per gm. There is provision for partial redemption if 25% or more of original amount seccured is remitted

XI.    SUGAMA SECURITY

Outstanding balance in Sugama account can be accepted as security for future liability in chitty/loan schemes. The deposit amount should at least cover the future liability. For the balance in Sugama Security account, interest @ 5.5% will be allowed. Monthly instalment can be adjusted from the account. The main advantage of the scheme is that the customer can release his documents pledged and also earn interest on the amount outstanding in this account.

XII.   COMBINED SECURITY

A subscriber/loanee is allowed to offer one or more types of acceptable security at a time, in combination, subject to certain rules and regulations.

Norms for our Schemes

a.                    Chitty 10% of future liability (instalments to be remitted) in the case of   SREG, 12.5% of future liability in the case of SRNEG and SREG/SRNEG combination.
b.                    New Chitty Loan 10% of loan amount in case of SREG, 12.5% of future liability in the case of SRNEG and SREG/SRNEG combination
c.                     Consumer/ Vehicle Loan 10% of future liability (Advance + Finance charge) in the case of SREG, 12.5% of future liability in the case of SRNEG and SREG/SRNEG combination
d.                   Trade Financing Scheme   10% of loan amount of SREG sureties.
e.                    Reliable Customer Loan   The amount to be secured under RCL will be the future liability i.e. principal plus interest. There are no separate security norms.

The security norms in vogue are applicable. However mutual surety will not be accepted.  In the case of immovable property immovable property valuation is half times of the market value..

The applicant should execute a loan agreement on stamp paper worth Rs.100/- in the prescribed format.

 
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