Tuesday, February 12, 2008


W e l c o m e t o K S F E ...........the Biggest Non-Banking Financial Company in KeralaEnsconced between Manjeswaram in the North and Parassala in the South; Arabian Sea in the West and Western Ghats in the East lies our beautiful Emerald Green State. Thus safely nestled as it may be, it spreads its roots through almost all countries of the world through its diaspora resident in all the nook and corner of the globe. If a bit of exaggeration is allowed, we may venture to say that the "World is run by Keralites".It is estimated that there are over 20 lakhs of non-resident Keralites, sending home over Rs. 25000 crores per annum. This remittance, without an iota of doubt forms the backbone of Kerala economy. In order to honour the NRKs for their laudable contributions to the economy of Kerala, KSFE has now launched "Pravasi Bandhu Chitty" Campaign.All permanent residents of Kerala who are relatives, friends and associates of NRKs can enroll in these Chitties.This Campaign offers Fabulous Prizes, Higher Interest for Deposits and Attractive Loan PackagesPrize Offers# 5 Maruti Alto cars to subscribers selected through draws.# 50 to & fro air tickets to UAE to subscribers selected through draws# 250 gold coins of 4 gm. each to customers selected through draws.HIGHER INTEREST RATES FOR DEPOSITSSubscribers depositing their prize money as Chitty Security Deposit in Trust, i.e. deposits on which lien is noted as security towards the future liability of Chitties floated during this Campaign will now be eligible for an interest rate of 10.5% p.a. However this rate is subject to change, but will be more than the FD rates offered by nationalized banks by atleast 0.50% at any point of time. Such high interest earnings will bring down the burden of monthly remittance in Chitty. For example in a Chitty with sala of Rs. 1,00,000/- and remittance of Rs. 2000X50 months, if the prize money is bid for a maximum dividend of 25%, the subscriber will be eligible for a prize amount of Rs. 70000/-. If this amount is deposited in CSDT the subscriber will be eligible for a monthly interest of Rs. 613/-. On transferring this amount to the concerned Chitty the amount required for monthly remittance will be reduced by at least 1/3rd of the monthly remittance. Thus with a total remittance of Rs. 55,000/- to Rs.60,000/-,the subscriber will be able to get back the deposit of Rs. 70000/- at the termination of the Chitty, thus enabling him to earn very high returns.We offer Very attractive Special loan packagesWe offer 4 special loans under this package exclusively for Pravasi Bandhu Chitty Subscribers, in order to fulfill all types of credit needs of the customer.
To enroll e-mail your name and address, the branch you like to enroll and the sala you want


Joing in KSFEchitties trough here will invite attractive fabulous prizes to you just email your name,address,Ph.No.&the Branch and sala you like to join or call to 9388804486.


BranchSalaProposed To Start On
Medical College Calicut5000*100=5LakhsFeb'08
Medical College Calicut1000*100=1LakhsFeb'08

Enroll Now

Monday, February 11, 2008




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$ Better Returns to Investors.
$ Lowest Cost to borrowers.
$ Easy liquidity through advances under Pass Book Loan (PBL),...New Chitty Loan (NCL) schemes.
$ CSDT- facility.
$ Investor protection through Chitty Act.
$ Public trust, credit worthiness and branch network.
$ Door collection and service of agents.
$ Acceptance of gold as security and wide array of securities.
$ Convenient duration and subscription amount.
$ Easy and transparent operation & inter branch facility
Break even point in chitty - Interest v/s Discount foregone
Bidding Thump Rule :- No:1 [As a borrower]Bid the chitty at the maximum rate, since cost of chitty is always much less than the borrowing cost.No.2 [As an Investor] In the continuous bidding process, if the discount foregone/available on each month is less than or equal to the proportionate of the gross /maximum discount for the month, bid the ticket immediately and invest the proceeds in CSDT or other secured investment/deposits.
Tips :- I. Per unit (in % terms) of discount foregone correspond to interest earned on the prize money should be arrived to maximize the return from chitty. II. Discount forgone in auction should be suitably compensated with the interest/return earned by prize money receipt during the course of the chitty.
* Cash flow based computation :- (for investors)
Ex : - [ Rs 2000 X 50 months = sala (Rs) 100000]
i) If the chitty is auctioned at the 18th month \ instalment at a total discount of 11%. prize money payable is 100000-11000= Rs 89000.
ii) Interest accrued on PM deposit for the balance period of (50-19) = 31 months @ 10%. Therefore total interest for Rs 89000 @ 10% for 31 months is = Rs 23733. Total prize money at the end of chitty Rs 89000.
Total receipt/ inflow from chitty = 23733+ 89000 = Rs 112733
iii) If the total dividend earned is Rs 6000 during the entire chitty period, The net outflow of the chitty is Rs100000 - 6000 = Rs 94000.
IV) Net Surplus in chitty Rs 112733 - 94000 = 18733
iv) Annualised average return = Rs 18733 / 50 = Rs 375. v) Inflow based annual average return: 375/1625 *100 = 23% Annualised Return (%) = 375/2000* 100 = 18.75% (without considering reinvestment or compounding effect and returns is worked out on gross subscription amount instead of net investment/subscription).
Comparative result of a post-office R.D Scheme
[ 5 year scheme (60 Months duration) at a monthly investment of Rs 150]
Total contribution/ investment =150*60 = 9000..
Total interest earned = 2227
Total inflow = 11227Inflow based annual average return = 2227/60 = 37Annualized average Return % = 37 / 150 *100 = 24.5% Note:- Here the return is high since the matching investment period selected is lower in the case of chit scheme ie, we took only 50 months duration in chitty. If chitty duration is 60 months the return will further jump to a higher percentage level )
Ex:-IIi) If the chitty is auctioned at the 18th month/ instalment at a total discount of 5. 5% (including F. C), then the prize money payable is [Rs 100000 - 5500 = Rs 94500].
ii) Interest accrued on PM deposit for the balance period of [50-19] = 31 months. Therefore total interest for prize money for the balance duration of the chitty @ 10% is = Rs 24412.
iii) Total inflow from the chitty (i) + (ii) above = 94500 + 24412 = 118912. iv) If the dividend earned in the chitty is very less ie, only to an extend of Rs 5000. Therefore, net outflow of the chitty is Rs 100000 - 5000 = 95000. v) Net surplus in the chitty is (iii) - (iv) = Rs 118912 - Rs 95000 = Rs 23912.vi) Annualised average return in the chitty is 23912/50 = 478. vii) Return (%) = 478/2000*100 = 23. 9%
Chitty as a Loan Product. Cost of Chitty :- [Loan V/s Chitty]i) Chitty Rs 2000 X 50 months = Rs 100000ii) If the chitty is auctioned at maximum rate the cost is Rs 30000 for 50 months.Hence, annualized cost is = 30000/50*12=7200 = 7. 2 % iii) If there is an auction discount of Rs 6000 accrued for the entire course of chitty .Net cost of chitty is = Rs 30000 - 6000 = 24000 Hence annualized cost /year = 24000/50000*12 = 5.76 %. iv) Cost of funds will further come down, if duration of chitty is higher at 60 to 100 months duration. Hence, for long term borrowings chitty is most attractive/preferred source/route.
$ Chitty can be used as a best medium of savings for all types of individuals, traders, business class, self- employed persons, etc and any desired asset/portfolio can be created within the duration of the chitty.
$ Chitty can be best used as a low-cost source of fund by all individuals, compared to any other source of funds/ loans in the debt market.
$ All future financial requirements / objectives can easily be planned and met through chitty.
$ Traders can use chit funds as the cheapest cost of funds for commercial use and net outflow in chitty is a deductible business expenditure as per Indian tax laws.
$ Chitty can be used as a medium of investment. The prize money can be utilized for other investment/productive purposes.
$ Effect of inflation will be almost zero in chitty as the corpus of the chitty is received back well before the termination date of the chitty compared to any other banking/financial products.$ Tenure/duration and denomination is flexible in chitty scheme.
$ Enrollment in chitty of appropriate duration / time span ensures fulfilling each of the future financial needs/objective such as House Construction / acquiring immovable properties, vehicles, furniture, house-hold equipments, foreign tours, marriage of daughters, children's education, retirement planning, hospitalization/treatment cost etc.
$ Tax planning can be made through chitty.
* The calculations shown in this sheet are based on situations usually observed in the conduct of KSFE chitties. There can be variations under actual circumstances.
BID AMT.For Sep.10