What is Kerala Pravasi ChittiKerala Pravasi Chitti is a latest and unique financial saving scheme for the benefit and welfare of Malayalees living abroad. It is a chit scheme with additional benefit features.
The online registration process for the Pravasi Chitti was started by the Kerala Chief Minister Shri Pinarayi Vijayan at Trivandrum on Monday 18 June 2018. Ashraf Thamarassery, social worker in UAE completed the process for the first registration. Another NRI Keralite Naveen Kumar, who was winner in the online contest held in connection with the scheme, was the next to do so.
The scheme is launched by Kerala State Financial Enterprises (KSFE), a government supported authority conducting Chit Funds in Kerala since the sixties. The first registration process was completed. The Pravasi Chitty at this stage is for the Keralites in the UAE only. But it will be extended to the GCC countries and beyond sometime later.
What are the features and benefits of Kerala Pravasi ChittiIt is a unique savings scheme started by the Kerala Government for the benefit of Non-Resident Keralites.
State Finance Minister Dr TM Thomas Isaac said the KSFE Pravasi Chitty is an attractive investment offer for the NRKs.He said, "… it is intended to make use of Chitty for the development of the state. No NRK has to contribute single paisa to Government for this purpose. All that they have to do is to join in NRI chitty of KSFE."
Background and Significance of Kerala Pravasi ChittiNon Resident Keralites were and are contributing to the economy of Kerala in a major part by sending the NRI remittances. NRI deposits in the state are to the tune of Rs 1.52 trillion with various public sector and private banks in Kerala. However, majority of the NRKs are not well-off. They are always under the risk of losing jobs and thus need some provision to fall back upon to take care of them when they return to Kerala once for all. Chitti was a traditional, popular and accepted method of saving and credit solution for the people of Kerala. It will not be exaggeration if we say that it is a unique feature of Keralites, wherever they are.
Earlier, the NRIs were not allowed to invest in chits here. Hitherto, the NRI community were investing in the KSFE Pravasi 'Bandhu' Chits through their families; In June 2015 Reserve Bank of India amended the rules and allowed NRIs to directly invest in Chit funds on Non-repatriation basis without any ceiling. This was a very good move to facilitate and encourage capital flow to the country.
The amendment said that the registrar of chits or an officer authorized by the state government may permit any chit fund to accept subscription from NRIs on non-repatriation basis. Kerala government and KSFE, who are specialists in Chits, rose up immediately to use the opportunity. Kerala government granted necessary permissions to KSFE to accept subscriptions from NRIs in chits.
Hopes and apprehensionsThe ambitious Pravasi Chitti scheme aims to mobilize Rs 10,000 crore in three years. The KSFE is well known for its trustworthiness and credibility. It plays an important role in the lives of a large number of Malayalees within the state in meeting their urgent financial needs for the expenses connected with marriage of their children, building a home or purchase of a vehicle or carrying on a business. KSFE Chitty is a household name in the state. It is such a strong and stable platform which has high trust and credibility that launches and manages Pravasi Chitty. The NRKs will not have any hesitation to invest with KSFE.
To feel the pulse of the NRKs, KSFE conducted about 160 'Pravasi Bandhu Samgamam' and say that the feedback was quite encouraging. They are made to understand that NRIs, who were already investing in KSFE chitties through their relatives or by themselves when they return home, are now waiting for the Pravasi Chitty scheme to open subscription. Considering the number of Keralites abroad and their affinity towards Chitti scheme, it can be reasonably hoped that the scheme will exceed its target before the expected deadline.
However there is slight worry among the economists. They have observed the decline in migration. S Irudaya Rajan, head of the migration unit at Centre for Development Studies (CDS), feels that Kerala's Gulf connection could end in another 10 to 15 years. Even for this year economist predict a decline of 5 to 10 percent in remittances. Nitaqat policy and new taxes being introduced by the Saudi government will lead to the return of large number of NRKs. The new infrastructure projects should get implemented before that happens. For that also the success of Pravasi Chitti is a necessity.
ConclusionThe KSFE Pravasi Chit fund is for Non Resident Keralites abroad who are between 18 yrs and 55 years. Though anyone anywhere can register, scheme will be first open for NRK s in UAE only. Later on, it will be made available for NRKs in other countries also. The actual subscriptions expected to be starting by July-August 2018.
As of now it is a good opportunity the NRKs opening in front of them for a safe, stable and trustworthy investment with a reasonable return. They can also have the self satisfaction of being partners in the development of their home state too.