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How to invest in Kerala Pravasi Chitti – a chit fund with insurance for Non-Resident Keralites

Chit funds are a popular form of savings cum emergency credit solution for all people. However Keralites abroad (being NRIs) were not permitted to subscribe to Chit funds. Their long time wish is now fulfilled as the legal bar is removed and Kerala government has launched the Kerala Pravasi Chitti-a unique chit fund with insurance for the Non Resident Keralites residing abroad. Check out this article to know its significant features.

What is Kerala Pravasi Chitti

Kerala 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 Chitti

It is a unique savings scheme started by the Kerala Government for the benefit of Non-Resident Keralites.

  • Fully online, digital scheme : Through online facilities, anyone, from anywhere in the world can take part in the chitty activities very easily via the online facilities. Entire procedures and processes of the chit scheme right from registration, paying monthly subscriptions or bidding for auctions, will be digital only. A dedicated web portal and a mobile app are developed for the scheme. KSFE has no branches abroad. But a 24x7 exclusive virtual branch office functions at Infopark for the Pravasi Chitti, to respond and redress subscribers' grievances.
  • Insurance and Pension schemes : It has the cover of LIC insurance. In the unfortunate event of death or permanent disability happening to the subscriber, during the currency of the Chitti, all the remaining monthly subscriptions will be completely covered by the LIC. There is no additional charge for the insurance cover and it is purely a social security welfare measure.
  • An optional pension deposit scheme : The chit subscribers have the option of depositing the prize money in an (optional) group pension scheme by which they would be entitled to an annual pension on return to the homeland
  • Platform for mobilizing funds to finance Kerala's infrastructure projects : The funds collected from the Pravasi Chitti, will be routed to KIIFB- Kerala Infrastructure Investment Fund Board which is the technical partner of KSFE Pravasi Chitties. KIIFB is constituted under the Finance Department of Kerala in1999, for raising and mobilising funds to finance critical and large infrastructure projects in the state.

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 Chitti

Non 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 apprehensions

The 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.


The 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.

  • Interested NRKs can visit https://portal.pravasi.ksfe.com for registration
  • More details can be had from https://pravasi.ksfe.com/faq.php
  • Facebook page:www.facebook.com/KSFEPravasiChitty/

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.

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Author: Umesh27 Jul 2018 Member Level: Diamond   Points : 4

It is good that the NRIs are getting a good opportunity to send and invest money back home in a scheme backed by the state Govt.

There is one thing in such schemes which is to be seen carefully that the funds generated should be utilised in viable and return giving avenues so that the contributors are benefited. Even in case of discontinuation of the money supply from abroad, these funds should survive on their existing kitty.

I hope there will be Govt agencies monitoring the appropriation of these funds minutely so that the subscribers should not be adversely affected.

Author: dipti07 Aug 2018 Member Level: Silver   Points : 2

Maybe being a non-Keralite, I have never heard of such an investment before as it is quite peculiar to the community as mentioned in the article. I have learned, in details, of a good investment opportunity which exists for the NRIs. I would refer the article to my friends abroad. I am sure it would be beneficial for them to know about the scheme.

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