ksfe organisation study

A REPORT ON ORGANIZATIONAL STUDY

INDEX

CHAPTER 1: INTRODUCTION……………………………………………..….2o OBJECTIVE OF THE STUDY

o RESEARCH METHODOLOGY

o SCOPE OF THE STUDY

o LIMITATIONS OF THE STUDY

CHAPTER 2: INDUSTRY PROFILE………………………………………………....7CHAPTER 3: COMPANY PROFILE………………………………………………..13

o HISTORY OF THE COMPANY

o RECENT DEVELOPMENTS

o PRESENT SCENARIO

o VISION OF THE COMPANY

CHAPTER 4: PRODUCTS PROFILE…………………………………………. 22o LINE OF PRODUCTS

o CHITTY FUNDS – THE PILLAR PRODUCT OF KSFE

o BRIEF ABOUT OTHER PRODUCTS

CHAPTER 5 : ORGANIZATIONAL STRUCTURE…………………………..39o ORGANIZATION CHART

o DUTIES AND RESPONSIBILITY

o WORKS DONE IN THE BRANCH

o PROCEEDURE OF ACCOUNTING THE DATAS

CHAPTER 6: DEPARTMENT PROFILE…………………………………..……54o COLLECTION DEPARTMENT

o ACCOUNTSDEPARTMENT

o GENERAL ADMINISTRATION DEPARTMENT

o DEFAULT FOLLOW UP DEPARTMENT

o SPECIAL GOLD LOAN DEPARTMENT

CHAPTER 7: SWOT ANALYSIS……………………………………………..... 62CHAPTER 8: FINDINGS AND SUGGESSTIONS……………………………...65CHAPTER 9: CONCLUSION………………………………………………........68


CHAPTER 10: BIBLIOGRAPHY…………………………………………....…..70

CHAPTER 1INTRODUCTION


INTRODUCTION TO THE STUDY

This organization study is carried out at KERALA STATE FINANCIAL

ENTERPRISES, CHERAI, and ERNAKULAM. The organization study has been carried out to

get an overview of the structure and functioning of the organization. The study was undertaken

to get an exposure to the functioning of different departments of the company and it helped to

interact with the managers of different departments and to observe the workers at their work

place and to act together with them. The purpose of the study is to get a clear-cut idea about the

structure and functioning of different departments of the company.

The study is confined to 30 days based on the primary data obtained from the head of

various departments, the middle level managers and other staff. The study covers in brief about

the present position of the bank..

An organization is a social agreement which pursues collective goals, controls its own

performance, and has a boundary separating it from its environment. Organizations are studied

by researchers from several disciplines, like sociology, economics, political science, psychology,

management and organizational communication. The broad area is commonly referred to as

organizational studies, organizational behavior, or organizational analysis. Therefore a number

of different theories and perspectives exist, some of which are compatible, which are given

below.

Organization: Process related - an entity is being (re)organized. (Organization as task or action)

Organization: Functional related – organization as a function of how entities like

businesses or state authorities are used (Organization as a permanent structure)

Organization: institutional – an entity is an organization (organization as an actual

purposeful structure within a social context.)


Types of Organizations:

1. Static organization

2. Dynamic organization

3. Adaptive organization

This help us to know the various departments ,its functions and workings are studied in details

with the interactions made with several managers and workers . It helps to know more about the

functions, structure, policies, duties and different procedures of the organization

OBJECTIVES OF THE STUDY

The project was conducted in KSFE, Cherai, keeping the following objectives in view:

The project was done to understand the working of a financial institution.

To understand the different financial instruments / products used in a financial institution

and the response of the public on different products

To understand / study the organization structure and the roles and responsibility of each

individuals working in the company.

To understand the accounting procedures of different type of financial products like

Chitty Products, Savings Deposit, and Fixed Deposit etc.


RESEARCH METHODOLOGY

This report is based on both primary & secondary data collected from the company.

Primary data

The primary data was obtained by:

Direct observation

Through Interview

Secondary data

The secondary data is the second hand data collected from books and the other sources

and this includes:

Journals & magazines

Existing records in the company

Published documents

Website of KSFE

SCOPE OF THE STUDY

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, Cherai 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.


LIMITATIONS OF THE STUDY

The following bulletin points will describe the important “LIMITATIONS” of the project conducted:

Lack of time is a limiting factor

Many of the respondents were busy and they allowed only limited time for the interview.

The area of study was limited to head office

Busy work schedule of officials

The organization did not reveal its profit and loss or any other statistical data.


CHAPTER 2

INDUSTRY PROFILE


INDUSTRY PROFILE

KSFE is a Miscellaneous Non Banking Financial company. A Non-Banking Financial

Company (NBFC) is a company registered under the Companies Act, 1956and is engaged in

the business of loans and advances, acquisition of hares /stocks/ bonds/ debenture issued by

Government or local authority or other securities of like marketable nature, leasing, hire-

purchase, insurance business, chit business but does not include any institution whose principal

business is that of agriculture activity, industrial activity, sale/ purchase/

construction of immovable property. A non-banking institution which is a company and which

has its principal business of receiving deposits under any scheme or arrangement or any other

manner, or lending in any manner is also anon-banking financial company.

NBFC are doing functions as in to that of banks; however there are a few differences.

NBFC cannot accept demand deposits. (Demand deposits are funds deposited at a

depository institution that are payable on demand -- immediately or within a very

short period.)

It is not a part of the payment and settlement system and as such cannot issue cheques

to its customers.

Deposit insurance facility of DICGC is not available for NBFC depositors un like in

case of banks.

Chit companies as defined in clause (b) of Section 2 of the Chit Funds Act, They are regulated

by respective state governments.


While making deposits with a NBFC, the following aspects should be borne in mind:

I. Public deposits are unsecured.

II. A proper deposit receipt which should, besides the name of the depositor/s state the

date of deposit, the amount in words and figures, rate of interest payable and the

date of maturity should be insisted. The receipt shall be duly signed by an

officer authorized by the company in that behalf.

III. The Reserve Bank of India does not accept any responsibility

or guarantee about the present position as to the financial soundness of the

company or for the correctness of any of the statements or representations

made or opinions expressed by the company and for repayment of

deposits/discharge of the liabilities by the company.

A robust banking and financial sector is critical for activating the economy

and facilitating higher economic growth. Financial intermediaries like NBFCs

have a definite and very important role in the financial sector, particularly in a

developing economy like ours. They are a vital link in the system . After the

proliferation phase of 1980s and early9 0 s , t h e N B F C s w i t n e s s e d c o n s o l i d a t i o n

a n d now the number of NBFCs eligible to accept deposits is around 600, down

from 40000 in early 1990s. The number of asset financing NBFCs would be even

lower, around 350, the rest are investment and loan

companies. Almost 90% of the asset financing NBFCs are engaged in financing

transportation equipments and the balance are in financing equipments for

infrastructure projects. The role of non-banking sector in both manufacturing and

services sector is significant and they play the role of an intermediary by

facilitating the flow of credit to en d c o n s u m e r s p a r t i c u l a r l y

i n t r a n s p o r t a t i o n , S M E s a n d o t h e r u n o r g a n i z e d s e c t o r s . N B F C s d u e

t o t h e i r i n h e r e n t s t r e n g t h s i n t h e a r e a s o f f a s t a n d e a s y a c c e s s t o

m a r k e t information for credit appraisal, a well-trained collection machinery, close monitoring

of i n d i v i d u a l b o r r o w e r s & p e r s o n a l i z e d a t t e n t i o n t o e a c h c l i e n t a s w e l l

a s m i n i m u m overhead costs, are in a better position to cater to these segments.


Now, unlike in the past, NBFCs are very well regulated and supervised.

Just like banks they are required to be registered with RBI, follow stringent prudential norms

prescribed b y R B I i n t h e m a t t e r s o f c a p i t a l a d e q u a c y , c r e d i t / i n v e s t m e n t

n o r m s , a s s e t - l i a b i l i t y management, income recognition, accounting standards, asset

classification, provisioning f o r N P A a n d s e v e r a l d i s c l o s u r e r e q u i r e m e n t s .

B e s i d e s t h i s , R B I a l s o s u p e r v i s e s t h e functioning of NBFCs by conducting

annual on-site audits through its officials. Such rigorous regulatory framework ensures that

NBFCs function properly and follow all the guidelines of RBI. Thus in all respect the

monitoring of NBFCs is similar to or in some case more stringent than banks.

The role of NBFCs in creation of productive national assets can hardly be

undermined. T h i s i s m o r e t h a n e v i d e n t f r o m t h e f a c t t h a t m o s t o f t h e

d e v e l o p e d e c o n o m i e s i n t h e world have relied heavily on lease finance route

in their developmental process, e.g., lease penetration for asset creation in the US is as

high as 30% as against 3-4% in India. A conducive and enabling environment has been created

for the NBFC industry globally, which has helped it grow and become an essential part of the

financial sector for accelerated economic growth of the countries. This is not the

case in our country. It is, therefore, obvious that the development process of the

Indian economy shall have to include NBFCs as one of its major constituents with a very

significant role to play. In fact, RBI’s latest report titled “Report on trends on progress of

banking in India 2002-2003" observes:

“Not withstanding their diversity, NBFCs are characterized by their ability to provide

niche financial services in the Indian economy. Because of their relative

organizational flexibility leading to a better response mechanism, they are often

able to provide tailor-made services relatively faster than banks and financial institutions.

This enables them to build up a clientele that ranges from small borrowers to

establish corporate. While NBFCs have often been leaders in financial innovations, which

are capable of enhancing the functional efficiency of the financial system, instances of

unsustainability, often on account of high rates of interest on their deposits and periodic

bankruptcies, underscore the need for reinforcing their financial viability.


”The reach and volume of chit funds business, which has become an integral part

of the non-banking financial sector of Kerala, has been on the rise in recent years A measure

of the phenomenon can be had from the fact that between 1997-98 and 2002-03, the number of

chits registered in the formal sector was more than 45,000 with a total capital turnover of Rs.360

core.

According to a study by a working group constituted by the State Planning Board, about-

two thirds of these chits were registered in Thiruvananthapuram and Ernakulam districts with 43

per cent and 23 per cent, respectively

Similarly, it was found that there were 5,996 money-lending institutions in the organized

sector in the State as on March 2004 with the four southern districts of Thiruvananthapuram,

Kollam, Pathanamthitta and Alappuzha accounting for more than half of them. Against this,

there were only 3,376 commercial bank branches in the State. The population covered per

money-lending institution is 5,590 as compared to 9,431 per c o m m e r c i a l b a n k b r a n c h .

A c a s e s t u d y c o n d u c t e d b y t h e w o r k i n g g r o u p i n K a n n u r district

revealed that there were 139 money-lending institu tions in the formal sector,

of which 45 per cent were regi stered after 2001. The annual business turnover of

these institutions worked out to Rs.13.57 core. Of these insti tutions, around 70

percent had business turnover of less than Rs.5 lakh and only five per cent had turnover of

more thanRs.50 lakh.

A survey in Thiruvananthapuram district showed that around 15 per cent of

them moneylenders accepted deposits at interest rates of between seven and 12

per cent, while a majority of them extended loans at rates between 10 and 20 per

cent on security of gold. The major depositors were non-resident Indians and most of

the borrowers were ordinary w o r k e r s , g o v e r n m e n t e m p l o y e e s a n d

b u s i n e s s m e n . A n d t h e m a j o r d e f a u l t e r s w e r e farmers.

A primary survey among selected unregistered money-lending institutions in Kollam and

Kottayam districts by the Department of Economics and Statistics found that 50 per cent o f

t h e m o p e r a t e d t h e i r b u s i n e s s i n o w n b u i l d i n g s , w h i l e s o m e o t h e r s


w e r e o p e r a t i n g straight from the cash bag. The securities against which loans were given

included gold, cheques, promissory notes and land documents.

The working group is of the view that the money-lending institutions have been thriving

due to the inability of the conventional banking sector to accommodate more people due to high

operating cost. At the same time, bulk lending for micro credit can help redeem

the situation to a large extent.

Kerala State Financial Enterprises (KSFE) is the Government-owned, the dominant

chit’s player in the State. There were several private chit fund companies

providing financial services. It has a great prospect in nearby feature and aiming to be

competitive with other banks in Kerala


CHAPTER 3

COMPANY PROFILE


KSFE

TYPE : PUBLIC SECTOR

OWNED BY : GOVT. OF KERALA

FOUNDED : 6TH NOV. 1969

HEAD OFFICE : TRICHUR

NO. OF BRANCHES : ABOVE 415

CHAIRMAN : P.T.JOSE

MANAGING DIRECTOR : P.RAJENDRAN

INDUSTRY : FINANCE

PAID UP CAPITAL : 20 CRORES COVERED

BUSINES TURNOVER : 15000 CRORES

EMPLOYEES : 5100 ABOVE


HISTORY OF THE COMPANY

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 channelize 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 socialization was felt necessary.

Hire purchase financing and insurance were the new areas suggested for inclusion within the

ambit of the proposed organization. Accordingly, Government decided to organize a

public sector undertaking with the name ‘The Kerala State Financial Enterprises Limited’ for

the purpose of conducting Chitty, Hire Purchase and Insurance business under Government


control. 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, 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 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.The Management of the company is

vested in the Board of Directors constituted by 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 raised to 15.

The Directors shall hold office during the pleasure of the Governor. The Governor may,

from time to time, appoint 2 Directors other than the Managing Director as Chairman and Vice

Chairman of the Board. The first Board was constituted as per Government Order No. G.O. (RT)

4876/69/Fin. Dated 26thNovember 1969 and they assumed charge on 28th November 1969. The

Managing Director is appointed by the Governor on such terms and remuneration as he may

think fit from among the Directors for the conduct and Management of the business of the

company subject to the control and supervision of the Board of Directors. General Body

representing the shareholders shall be the supreme governing body of the Company


COMPANY PROFILE

The Kerala State Financial Enterprises Limited, popularly known as KSFE,

o Is a Miscellaneous Non-Banking Company,

o Is fully owned by the Government of Kerala.

o Is one of the most profit-making public sector undertaking of the State.

o Was created by the Government of Kerala with the objective of providing an alternative

to the private chit promoters in order to bring in social control over the chit fund

business, so as to save the public from the clutches of unscrupulous fly-by-night chit fund

operators.

o Has been registering impressive profits every year, without fail since its inception.

A striking point is that all the funds mobilized by KSFE through its various deposit schemes and

chitties are advanced wholly to the public in Kerala itself; whereas other financial institutions

and banks channel their deposits collected in Kerala for advances outside the State.


OBJECTIVES OF THE COMPANY

The objectives of the company are listed in the Memorandum of Association of the company.

The important objectives are as follows:

To start, conduct, promote, manage and carry on the business of chitties in India or

elsewhere.

To promote, undertake, organize, conduct, manage and carry on the business of

general and miscellaneous insurance of any kind in India or else where.

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.


VISION OF THE COMPANY

The vision of Kerala State Financial Enterprises is to become a significant player in the financial

services sector by:-

Providing a whole range of quality services and products.

Adopting technology and benchmark standards in customer service and performance.

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 the neighborhood institution for

support, trust and security


FUTURE PLANS 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:-

Making KSFE a fully computerized Company

Opening more and more new branches, including chitty units to establish its presence in

all major centers and backward areas, aiming at effective rural penetration.

Introducing value additions in chitty schemes - for coping with the fierce competition in

the financial market, for more popularity and widening our customer 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 Over draft and

Cumulative Deposit Scheme.

Expanding its door collection facility to loan accounts and deposit schemes suitably, this

is expected to create considerable employment opportunities as part of its social

objective.

Introduction of chitties with simultaneous draw and auction which can be offered as an

incentive to regular customers for whom it will be a great attraction, particularly for

those with saving attitude.

Introduction of Daily/Weekly draw/auction chitties, which is expected to have a wide

scope among traders, will raise the Company's market share considerably.

Enter the arena of Credit/Debit Card business - immediately after branch networking the

Company plans to launch the 'Debit Card' business.

Starting of Virtual Branch through net worked computer systems for the benefit of NRIs

particularly Malayalees in the Gulf & other countries is on the anvil. This will obviate the

need for "brick and mortar branches" and will enable customers who have internet access,

to transact with the Company through virtual branches.


GROWTH OF THE BUSINESSBusiness(in

crores) 2001-

02 2002-

03 2003-

04 2004-

05 2005-

06 2006-

07 2007-

08 2008-

09 2009-

10

Chitty Turnover 1451 1595 1647 1691 1787 1993 2570 3642 6183 Advances 540 510 480 558 648 851 1026 1284 1572 Total Deposit 1218 1430 1432 1304 1566 1697 1866 2240 2945 Aggregate Business 3209 3535 3559 3553 4001 4541 5462 7166 10700


CHAPTER 4

PRODUCT PROFILE

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

0

5000

10000

15000

20000

25000

Aggregate BusinessTotal DepositAdvancesChitty Turnover


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

an advance 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 the chitty (sala), whereas in

recurring deposit the advance can be availed only on the paid up amount. In case bidding is

delayed due to draw of lots in the initial installments, 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 in the chitty getting prized.

BASIC INFO ABOUT “CHITTY”

A Chitty is conducted by a person or an institution and this entity is called the foreman. In

the case of KSFE Chitties, KSFE is the foreman. 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.

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, the numbers of the such bidders will

be put to a draw. 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 than5% 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.

In case of unfortunate death of the subscriber the future liability subject to a maximum 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. 2,50,000 (the present

highest chitty of KSFE is 2,50,000 x 40=1 CRORE) and the usual 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 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.

ELIGIBILITY:

Any Indian citizen who has attained majority can subscribe in Chitties. Enrolment in 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 the total tickets in chitty. The existing

rules regarding Chitty canvassing agents stand revised with effect from 1.5.1999(see circular

64/99)

MONETERY RANGE & DURATION OF CHITTIES:

Sala of our chitties range up to 10lakhs with monthly subscriptions of Rs.25000/-. Branches

are permitted to start short duration chitties below 40 months with the consent of Regional

Manager concerned. Similarly to start chitties with a Sala exceeding 5 lakhs prior Head Office

permission should be obtained.

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 up to 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 on-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.

DEFAULT INTEREST:

9% on Non-prized default & 14% on prized default on the subscription amount

NEW CHITTY LOAN

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.

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:

Every non-prized subscriber of chitties will be eligible for availing new chitty

loan up to 50% of sala after remittance of 10% of the total installments, provided

the remittance are up to date.


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.

ii. When financial documents viz., FD Receipts, Bank Guarantee, LIC Policies,

NSCs, KVPs, etc., are offered security.

i. Where the applicant for NCL is a professional/Businessman having a taxable 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 sureties as 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 time for NCL up to 50% of the Sala, on

remittance of 10% of installments which have become due for remittance. He should

be up to date and prompt in the payment of the concerned NCL interest and

corresponding chitty installments.

ii. Outstanding dues if any, against the existing NCL account should be cleared either by

direct remittance or by adjustment from the fresh NCL amount to be sanctioned.

Where the installment amount with interest is 5000/- and above, the unit head should

ensure the repaying capacity of the loanee and make a note of it for sanctioning the

loan. The. Loan should not be sanctioned to a loanee whose previous loan account is

in default.

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 the security of

paid up subscriptions in the chitties.


LIMIT:

As per chart prescribed, based on the paid up amount in the chitty and the period

remaining for termination of the chitty. Gross subscription remitted reduced by Forman’s

Commission and debit balance is the paid up amount. Loan is rounded to the lower Rs.100/-

of eligible amount.

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.

AUCTION OF THE CHITTY:

The chitty can be allowed to be auctioned subject to the limit of 30% if the prize amount

will be adequate to cover the future liability in his chitty, the loan amount and interest

thereon. Prior written permission from the Unit Head to auction the chitty should be obtained.

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 provided such remittances are not

less than 10% of the outstanding balance as on the date of remittance.


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.

WHEN CHITTY IS DEFAULTED:

When chitty installments are defaulted the subscriber is removed observing the usual

procedures and the loan and interest thereon are adjusted from the RSC or APSTC 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.50/- and maximum Rs.200/-


BRIEF ABOUT OTHER MAJOR PRODUCTS

A. GOLD LOAN SCHEME:

The gold loan scheme was launched by the company on 16th Oct 1989. Under the scheme,

short term loans up to Rs. 20,000/- for a maximum period of 12months are provided on the

security of gold ornaments.

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 the unit head. The same should also be noted in the personal ledger folio. If the

market price of gold in various towns within the state differs from one another, the lowest prize

quoted may be taken as the base for fixing the eligible loan amount per grams.


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.

o Should know Malayalam (both reading and writing).

o Should have engaged in the manufacture of gold ornaments & must have sound

knowledge and experience of goldsmith work.

o Should have completed 25years of age and should not have completed 65 yrs as on the

date of engagement.

o 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 interest within

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 account can 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 the stipulated time,

the unit heads should initiate immediate steps for the auction sale of pledged gold ornaments

after fulfilling the usual formalities. The maximum period for repayment of gold loan is 1year

and even in cases where the loanee has remitted interest for the first 6months, the account has to

got closed immediately after 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 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.

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

accepted from 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 security towards the future

liabilities irrespective of the duration of the chitties and quantum of future liabilities.

a) Should be deposited in full without any deduction.

b) Subscribers who avail this facility should open a Sugama account in his/her name..

c) Should be a single deposit, initially. It can be split up into 2 or more deposits for different

period on the depositors’ request, when it becomes renewable, 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 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.

RENEWAL:

Fixed Deposits can be renewed with retrospective effect. When F.D. is renewed on a later date

interest will be given from the maturity date of the original deposit provided the deposit is

renewed for a minimum period of one year from the maturity date of the original deposit. The

rate of interest will be the rate applicable on the date of maturity of the original deposit.

LOAN FACILITY ON ENCUMBERED F.D:

1) 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 closing the existing loan on FD.

2) 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 for availing 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 to

consider individual cases on merit for FD loan above this limit of 75% subject to a maximum of

90% of FD amount.

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.


D. SUGAMA DEPOSIT SCHEMES:

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.

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 eligibility should be Rs.250/- or

more.

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:

5.5% 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 and31 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 exceedingRs.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.

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 unit he/she

intends to take the loan.

LIMIT:

The maximum amount of loan is Rs.15 lakhs /-. But in the case of single surety, offered by an

unemployed customer, the maximum loan liability is limited to Rs.2 lakhs /-.

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.

PENAL INTEREST:

Penal interest of 2% for each month of default on the defaulted installments amount 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 name of

a customer. To ensure this the covering abstract should be sent to HO and clearance obtained

before issuing the loan.

PREMATURE CLOSURE:

For premature closure re-calculation of EMI up to the month of closure is made minimum one

year’s interest is taken.


CHAPTER 5ORGANIZATION STRUCTURE

BRANCH MANAGER

ASSISTANT MANAGERADMINISTRATION

ASSISTANT MANAGERACCOUNTS

ASSISTANT MANAGERCOLLECTIONS

ASSISTANT MANAGERGOLD LOANS

ASSISTANTS AND MESSENGERS


ORGANIZATION CHART

GENERAL MANAGER

DEPUTY GENERAL MANAGER



HR HEAD FINANCE DEPT

RECONCILIATION

SECTION

LOAN SECTION

INSPECTION SECTION

CLERKS

ADMINISTRATIVE DEPT

NPA & RECOVERY

PLANNING & DEVELOPMENT

LEGAL

DATA CENTER

ESTATE

ATM CELL

ACCOUNTS SECTION


ORGANISATIONAL STRUCTURE


DUTIES AND RESPONSIBILITIES

Duties and responsibilities of Branch manager:-

He will responsible for the environment within the units in which his subordinates work

and will create conditions conductive 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 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…..

To do all the basic tasks of the Manager, such as;•

To plan the operations of his subordinates, organize, integrate, control land co-ordinate

their activities for maximum contribution to the Branch Manager as head of financial unit.

To post proper persons to various positions in the Branch, train and develop them to

accomplish their task effectively.

To organize their role relationship to start chitties conforming to the pattern prescribed by

the Head Office and achieve the targets fixed by the Company;

To issue advertisements, if necessary, directly to the local dailies with the approval of the

Regional Manager.

To perform the duties and to exercise the rights of the foreman under the relevant

provisions of the Acts relating to the chitty.

To receive proxy form on behalf of subscribers enter the details in the register prescribed,

to file the proxy forms chitty-wise, and to be responsible for the proper inclusion of their

names in the auction/ draw.


To keep correct minutes of the proceedings of every auction and drawings, sign the

minutes on behalf of the foreman and to file a true copy of the minutes with the Registrar

on the due date.

To take steps for the payment of the amount due to the defaulting subscriber on the due

date.

To demand in writing, consolidated payment of future subscription from defaulting

subscriber on the due date.

To prepare a separate Annual Balance Sheet for each chitty and to take steps for the audit

of such balance sheets and filing of copies with the Registrar at the appropriate time.

To initiate timely action under R.R. Act to collect defaulted subscriptions or other dues

recoverable, wherever necessary.

To send intimation cards indicating the amount due for the next installment to the

subscribers/ banks having standing instructions from the subscribers, timely.

To send recovery schedules to the drawing / disbursing officers in respect of subscribers

who have joined our salary deduction scheme and to ensure the remittances so received

are duly entered in the books of accounts promptly.

To develop chitty business of the branch by starting chitties timely and attain the budgeted

sala of business.

To verify the correctness of the entries in the Money orders Register, sign the Money

order forms, and to receive the Money order, on behalf of the Company.

To ensure that all the amounts received by Money order on the day have been duly

acknowledged by the cashier.

To ensure that the day-to-day accounts in the Units are written up on a current basis

and satisfactorily maintained.

To be responsible for the proper identification of the subscriber and of his

acknowledgements on the documents, payment voucher, cheque counter foil, personal

ledger folio etc and hand over the cheques to the parties concerned.

To be responsible for the safe keeping of all the documents relating to the payment of

prize money/ removed subscribers contribution

To reconcile the Bank accounts, Head Office Current Accounts and Regional Office

Current Accounts.


To arrange for the preparation of subscribers personal ledger schedules and their tallying

with control accounts.

To schedule payment of prize money in such a way that they are more or less evenly

distributed over the month, also taking into account the ways and means position and

giving priority of payment based on the date of receipt of surety/security applications and

subsequent execution of documents.

To transfer funds to the Regional Office within the date stipulated towards

Other Branch collections

Salary deduction

Share of tax and Head Office administration overheads

To deposit the entire collections of a day in the bank the same day or on the morning of

the next day.

To check occasionally and ensure that the employees have already performed their

assigned duties (including carrying out checking procedure) satisfactorily;

To build up and enhance the reputation of the Company in its dealings with the

subscribers and prospects, fostering friendliness with the general public projecting always

the good image of the Company so that we may merit a reputation of our own for the

quality of service;

To be responsible for the proper maintenance and updating of

(a) Personal files of all employees in the Unit

(b) Service records/books) Loans, advances and their repayments


Duties and responsibilities of the Assistant Managers:-

Assistant Manager/Deputy Manager will be the front line supervisor in the Officers’

Cadre who will discharge the following duties, functions and exercise the following powers

and report direct to the Unit Head.1. To do all the basic tasks of the front line supervisor,

such as:

a) To plan the operations of his subordinates organize, integrate, control and co-ordinate

their activities for maximum contribution;

b) To post proper persons to the various positions under his control, train and develop them

to accomplish their task effectively;

c) To organize their role relationships;

d) To direct their work by clarifying their assignments, guiding them towards improved

performance and motivating them to work with zeal and confidence;

e) To control them by measuring and correcting their activities to assure that events

conform to plans and to co-ordinate their work.

The major responsibilities of Assistant Managers are as follows:-

To be responsible for supervising and checking of all collection activities of the Branch.

To ensure by test check or complete check as may be appropriate that all the financial

transactions under his section are in order.

To verify the correctness of the entries in the Money Order Register with reference to the

Money Order Forms to initial every entry in the Money Order Register authenticating

its correctness

To be responsible for the correctness of the entries made in the Money Order Register

and of the amounts received and recorded in the Money Order Register.

To correspond with persons from whom the Money Order has been received incases

where proper details regarding such remittances are not available.


To receive and enter all the cheques/demand drafts received in the “Cheques/Bank Drafts

Sent for Collection Register” and to get defects, if any, rectified or to return the cheques

to the parties on the same day if the defects noticed could not be got rectified, close the

register every day.

To ensure that the cheques / bank drafts are duly crossed and if not, to cross them

“Account Payee”;

To supervise the postings in the Chitty Collection Registers/ Chitty Day Book, Personal

Ledgers/ Loan Registers/ Sugama Account Ledger and Collection Registers, and all

the other relevant registers.

To supervise and check the postings in the Personal Ledger

To ensure timely preparation and tallying of quarterly collection summary.

To ensure that the amount kept under suspense are cleared in time..

To regulate and conduct the draw/auction to act as proxy on behalf of the subscribers

who have authorized the Branch Manager for such participation.

To get the auction proceedings voucher prepared.

To get the default statements (prized, non-prized and loan schemes) prepared in time.

To operate the Bank account of the Branch jointly with the Branch Manager.

To make physical verification of cash with the Cashier at the close of business every day,

to certify the fact of having made such verification in the cash scroll and to bring to the

notice of the Branch Manager difference between the actual physical cash and book

balance;

To arrange for the preparation of chitty balance sheets and its filing.

To scrutinize the cheques/ demand drafts and ensure they are in order;

To be responsible for the remittance of daily cash collection (including the Money Order

collection) in to the bank on the date of collection itself or latest by the next working day,

for the maintenance of the Cash in Transit Register.

To be responsible for the safe keeping of the cheques received until they are deposited in

to the Bank.

To verify and initial transfer chalans and to be responsible for any erroneous or

fraudulent entry in respect of such chalans.

To ensure the writing up of the Chitty Ledger.


To verify the scrutiny report, ensure that the prize amount payable agrees with the figures

shown in the original auction minutes, ensure with reference to books of accounts that the

deductions to be made as shown in the report are accurate and initial the scrutiny report..

To get all payment vouchers prepared, to check and initial it, and to be responsible for its

accuracy.

To be responsible for the accuracy of the prize amounts and other payments made.

To review and submit monthly work position reports to the Branch Manager.

To ensure timely completion of annual accounts and related statements.

To transfer funds to Regional Office to wards:

Salary deduction

Share of tax and Head Office administration overheads along with the other Branch

collection.

For meeting emergency requirements.

To get the Bank account and Head Office Current Account/ Regional Office Current

Account reconciled monthly and to give the reconciliation statement, by 15th of every

succeeding month

To be responsible for the safe custody of all the relevant records, registers, vouchers etc.,

handled by him and seats under his control.

To initiate action for the starting of chitties in the Branch and to arrange the release of

advertisements with the approval of the Branch Manager.

To assist the Manager in canvassing subscribers as and when necessary

To obtain sufficient security for the payment of future subscription.

To take steps for the payment of prize money to the prized subscriber on the due date, if

the subscriber has furnished adequate security for the payment of future subscriptions,

and to intimate the fact to the prized subscribers;

To verify the genuineness/ liability of the subscribers/ sureties;

To examine all the documents concerned with the payment of prize amount and ensure

that they are in order and correct and complete in all respects.


WORKING OF THE BRANCH.

1. OFFICE HOURS

The Office hours for regular employees are from 10 am to 5 pm 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 am to 4 p.m. in Evening Branches.

2. LUNCH BREAK

45 minutes interval is allowed for lunch break and this has been fixed between 2p.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 authorized 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 addition to the holidays fixed for

each year all Sundays and Second Saturdays will be holidays for the Company.


5. MAINTENANCE OF OFFICE PREMISES

The Unit Heads in the Units, Regional Managers in the Regions and Administrative

Officer in the Head Office are responsible for the security, upkeep and proper maintenance of the

offices concerned. The office premises shall be kept clean and tidy. All employees are expected

to help in the maintenance of cleanliness of the office premises by not throwing about papers,

cigarette stumps, etc., and by not disfiguring walls, pillars etc., with writing of slogans and the

like and pasting and displaying posters on them .Recognized unions may, however, put up

notices about legitimate union activities in the space provided for them. The offices shall be

arranged to be opened at 8 a.mor earlier to enable the sweepers to sweep the rooms and premises,

cleanup the furniture, fittings, bathrooms and the lavatories. The Administrative Officer in the

Head Office, the Regional Managers in the Regions and the Unit Heads in the units shall

occasionally inspect the above work and ensure cleanliness and tidiness of the premises. Files,

registers and papers shall be methodically arranged and when not in use, should be kept neatly

stacked in the space provided. No files ,registers or papers shall be kept on the floor. Waste paper

should be kept in the waste paper baskets provided and not strewn about on the floor. Important

papers, files and other records should be kept in safe custody. It must be scrupulously ensured by

all concerned that small items of stationery such as pins, gem clips, tags, carbon papers, refill,

etc., are kept in their proper places and not allowed to lie strewn about on the floor. The offices

should be closed at the end of the day and the doors and windows securely locked. This should

be ensured by the Administrative Officer in the H.O., Regional Managers in the Regions and

Unit Heads in the Units or by the persons authorized in this behalf. It is the duty of every

member of the staff to observe strict economy in the use of articles supplied and facilities

provided. All stationery items supplied should be economized to the maximum possible extent

and all kinds of waste eliminated. Lights, fans should be switched off and water taps turned off

when not required for use.

6. ACCEPTANCE OF DONATION FROM SUBSCRIBERS.

Members of staff are strictly forbidden from seeking or accepting donations from

subscribers or others either in the personal capacity or in his representative capacity as member

or office bearer of an association.


7. DISPLAY OF NATIONAL FLAG

The National Flag shall be hoisted on the office building on special occasions like

Republic Day or Independence Day

8. OBSERVANCE OF BUSINESS DISCIPLINE IN THE INTEREST OF GOOD

CUSTOMER RELATIONS.

In the dealings of the Company with the customers, it is not enough that the employees are

just and fair, but they should make the customers feel that they are just and fair. In order to

ensure this the members of the staff shall observe the following business discipline in addition to

the directions given elsewhere in this manual:

(i) To act honestly and faithfully at all times

(ii) To demonstrate a sense of fair play and impartiality in disposing of cases;

(iii) To show courtesy and consideration in public dealings;

(iv) To maintain strictest secrecy regarding the Company’s affairs whatever be the

Provocation;

(v) To observe scrupulously the rules and regulations;

(vi) To avoid seeking and receiving cash, donations and advertisements from the

Company’s clients, constituents, business associates, etc., even for a good cause;

(vii) To attend the public grievances promptly;

(viii) To dispose of cases promptly but without undue haste;

(ix) To get all oral instructions and decisions of the higher authorities down in writing

and get them confirmed;

(x) To give job rotation to those who are on sensitive positions;

(xi) Not to issue or cause to issue cheques in favor of other subscribers/ loanee/sureties/

guarantors towards payments in connection with the business of the Company;

(xii) Not to attend the auction as proxy (except the Unit Heads) on behalf of others in the

Unit where they are working;

(xiii) Not to accept payments in connection with the business of the Company on behalf of

others except with the permission of the Unit Head, who shall exercise such caution

and discretion in this regard


(xiv) Not to make payments in cash in connection with business of the Company in lieu of

cheques issued;

(xv) Not to en cash cheques issued to subscribers/ dealers or others in connection with the

business of the Company;

(xvi) Only cashiers/ authorized persons shall accept cash from the transacting public who

should issue proper receipt and keep proper accounts.

(xvii) Not to accept blank cheques /cheques un-accompanied by pay-in-slips/ cheques not

duly signed and without details of remittance.

(xviii) To be impartial in all their dealings with the transacting public;

(xix) To supply the intending loanees with a list of approved dealers and the choice of

dealers left to them.


PROCEDURE OF ACCOUNTING THE DATA

Tally is used in KSFE Branches for accounting purposes and Excel is used for creating of

schedules, reports, daily fund flow summary etc.

The SAMPLE schedule for the major products of KSFE is as below:-


Apart from accounting in Tally, the cashier is maintaining the Daily Cash Scroll register also. The sample of the Cash Scroll Register is as follows,


CHAPTER 6DEPARTMENT PROFILE


A) The different departments of the Head Office are the following:

i. Business Department:-

This is headed by General Manager (Business) who is responsible for all business

activities of the Company.

ii. Finance Department:-

This department is headed by the General Manager (Finance). The main functions

of this department are planning, budgeting and control, compilation of accounts, reconciliation

and preparation of annual accounts, and controlling Deposit Schemes of the Company etc.

iii. Administration Department:-

This is headed by the DGM P& HR to be in charge of personnel administration , salary,

industrial relations, man power planning etc.

iv. Secretarial Department:-

This department is headed by the Company Secretary who is responsible for the functions

conferred on him by the Company’s Act, 1956.

v. General Administration Department:-

This department is headed by one of the senior officers of the Company who will be

responsible for the General Administration including purchase, printing etc.

vi. Legal Department :-

This department is headed by AGM (Legal) who is responsible for all day to day legal

matters.

vii. Internal Audit Department :-

This department is headed by the DGM (IA&V) assisted by seventeen audit teams to

exercise internal check and control.

All the above Department Heads report directly to the Managing Director.


(B) The different departments of the Regional Office

The activities of the Regional Managers are grouped functionally as well as scheme wise.

They are mainly responsible for the proper and also healthy functioning of the Branches and to

be in charge of the overall growth and development of the Branches under their jurisdiction.

The Regional Managers report directly to the General Manager Business and the General

Manager Finance for the respective functions and to the Managing Director relating to the other

functions. The functional departments of the Regional Office are Business, Accounts, and

default; which corresponds to respective departments with focus on operational aspects

C) The different departments at Units level

At the base level the Units are graded into three categories viz.

(i) Major Branches having a chitty sala of Rs.70 lakhs and above.

(ii) Medium Branches having a chitty sala of Rs.40 lakhs and above and

(iii) Small Branches having a chitty sala of below Rs.40 lakhs.

A Unit Head viz, the Manager; heads each Unit and its activities are grouped

under Assistant Manager(s)/ Deputy Manager(s). The Unit Heads report directly to the Regional

Manager and to the Departmental Heads in the Head Office on matters pertaining to the

departments concerned. In exceptional circumstances the Unit Heads can report directly to the

General Manager (Business)/ General Manager (Finance) and Managing Director.


The different departments in the unit are as follows:

1) Collection Department

Assistant manager (collection)

Assistant (cash)Assistant (FD/STD)

Assistant (Sugama)

Assistant (Auction)


Important functions of collection department are

Receive money from customers

Give receipt to customers

Ensuring proper document for every receipt

Entry of transactions in the books.

Internal checking

Maintain effective coordination with accounting department

Preparing periodic collection report

Sending collection agents to collect money.

To arrange for the preparation of chitty balance sheets and its filing.


An assistant manager will be the head of this department. She/he monitors all activities relating

to receipt of cash and has the responsibility of ensuring that there are no mistakes or frauds

committed during transactions. Major decisions relating to the receipts of funds are taken by the

AM Collection. All staff in the collection department should report to him/her. She/he delegates

responsibility to the staff under him/her.


2) Accounts Department

Important functions of accounts department are

To be responsible for the remittance of daily cash collection (including the Money Order

collection) and cheques in to the bank on the date of collection itself or latest by the next

working day.

To ensure once in every fifteen days that the cheques sent for collection are either

realized or dishonored and the entries in the Cheque Sent for Collection Register are

complete in every respect.

To ensure the writing up of the Main Cash Book, to sign it and to check the postings of

General Ledger and to be responsible for the accuracy of the postings.

To examine all the documents concerned with the payment of prize amount and other

Payments and ensure that they are generally in order and in particular ensure that all the

amounts mentioned in the documents are accurate.

To ensure satisfactory maintenance of accounts in the branch, arrange the preparation of

all statements/ schedules relating to the accounts and to render all returns relating to

Accounts to the Head Office/ Regional Office.

To ensure timely completion of annual accounts and related statements.

Assistant manager (Accounts)

Assistant (Loans / chitty price money payments) Assistant (book keeping)


3) General Administration Department

Important functions of general administration department are

To initiate action for the starting of chitties in the Branch and to arrange the release of

Advertisements.

To assist the Manager in canvassing subscribers as and when necessary

To issue variolas (application form for joining chitty) to the canvassing agents of the

Branch, maintain the Agents Register and verify the claims for commission received

from agents.

To take steps for the payment of prize money to the prized subscriber on the due date, if

the subscriber has furnished adequate security for the payment of future subscriptions,

and to intimate the fact to the prized subscribers.

To verify the genuineness/ liability of the subscribers/ sureties.

To be responsible for the entire personnel administration of the Branch for the proper

maintenance of Attendance Register, Casual Leave Register and other leave accounts,

personal files, service records/ books , provident fund records, loans, advances and

its repayment etc

Assistant Manager (general)

Assistant (Loans / chitty price money payments)

Assistant (New chitty registration)

Assistant (collection agents)

Assistant Manager (Gold loan)

Assistant Appraiser

Assistant Manager (Default)

Assistant (Current default) Assistant (Chronic default)


4) Default follow up Department

Important functions of default follow up department are

Monitoring of default on a current basis in all schemes of the company.

Initiating necessary follow up action including RR, in cases of chronic default

Timely preparations of default statements

5) Special Gold Loan Department

Important functions of special gold loan department are

Assistant Manager

Implementer


Speedy and efficient disbursal of Gold Loan

Safe custody of ornaments pledged.

Default monitoring of the Gold Loan scheme

Initiating auction steps in cases of chronic default.

Preparation of periodic schedules.

6) Systems Department

KSFE

is passing through the infancy stages of its computerization process. The unit level systems

department is now formed on an ad-hoc basis. There is no exclusive assistant manager provided

for this function. Generally any one of the assistant managers who is in charge of Collection/

Accounts/ Default is given additional responsibility to supervise this function. Generally, he is

required to look after issues related to software / hardware / data entry errors etc and at the same

time extent a helping hand to other general activities of the branch.

Important functions of systems department are

Ensure smooth functioning of all the computer systems.

Reporting software errors/bugs to Head Office.

Timely reporting of hardware failures to the Vendor/AMC Company.

Taking data back ups at the prescribed intervals.

Providing information and assistance to other employees in matters related to system.


CHAPTER 7SWOT ANALYSIS


SWOT ANALYSIS

Strength

Better customer relation.

Good products and services.

Reasonable repayment period.

Better customer satisfaction.

Government owned Company.

Variety of services other than chitties.

Variety of chitty schemes and several other facilities associated with chitties.

Works similar to banks.

Branches throughout Kerala.

Skilled employees selected through public examinations

A relatively younger work force.

Transparency in operations.

Updated website gives information about new developments in all branches.

Tie up with insurance and western union money helps to attract more

customers.

It uses effective advertising campaigns.


Weakness

Lack of marketing activities.

Lack of computer knowledge of workers.

It has the limitations of NBFC’s.

Still main business area is on chitties and not yet able to grow in other

services.

Lack of fieldwork in marketing.

Opportunities

Improve marketing activities.

Introduce a disaster recovery system.

Expansion of small-scale industries in the state.

Rising middle class.

Rise in income.

Saving thirst increases.

Ensuring more participation of NRI families in the schemes of KSFE.

Developing rural areas provide an opportunity to increase customer base.

Threats

Tough Competition.

Policies of Reserve Bank.


CHAPTER 8FINDINGS AND SUGGESSIONS


FINDINGS AND SUGGESTIONS

FINDINGS

KSFE is leading player in chit business in Kerala.

Security of Data center is not sufficient

Some issues are associated with recovery procedure

Possess an uncorrupt and dedicated work force.

The organization is engaged in a face lifting effort.

Variety of services for various needs of customers.

Government owned company which mobilizes the fund within Kerala.

The extensive branch network combined with its elite and dedicated work

force gives the much-needed flexibility for the organization.

Flexibility in schemes according to customer needs.

Some of the services are unique to KSFE.

Wide acceptability among middle class.

It improves saving habit of people.

Agency system has not yet proven its merit and there seems to be clear

division between agents and company staff.

Lack of concentrated and coordinated marketing efforts .

Lack of specific transfer norms and the undue influence of trade unions in

these matters.

Total absence of modern performance appraisal mechanisms.

No modern facilities for remittances like e-payment or ECS.

Absence of effective customer feed back surveys and marketing research


SUGESSTIONS

More awareness campaigns and advertisements should be organized in order

to attract public.

Introduce a disaster recovery site for data center. That will ensure safety of

data.

Try to introduce new schemes as per customer requirements

Give much concentration on recovery procedures

Effective customer feedback mechanisms should be introduced.

Need more branches in rural areas.

Employee motivation needed.

More management techniques need to be adopted


CHAPTER 9

CONCLUSION


CONCLUSION

As there is a proverb that:-

“A journey of a thousand miles begins with a single step”

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.

This ‘organizational study’ was an attempt to study the organizational structure and the

department functions and to provide an analysis on the basis of the functioning of the

organization. The data with regarded to the study collected from the KERALA STATE

FINANCIAL ENTERPRISES LTD. Helped to understand the process.

The study provides information about the products, organizational structure of the

company, departmental functions and gives a good knowledge about the financial position of the

company. The co-operation and interaction extended by the employees and management of

KSFE have made it possible for the in-depth organizational study which would be used to the

research in the future.


CHAPTER 10

BIBLIOGRAPHY


BIBLIOGRAPHY

Moshal B.S. (2010) , Principles of Management, Anne Books Pvt. Ltd.

Pandey I.M. (2001), Financial Management, Vikas Publishing House Pvt. Ltd.

WWW.KSFE.COM

ksfe organisation study

Documents

organization organization

organization study

study chapter

organization objectives

action organization

adaptive organization

company chapter

study limitations