Thiruvananthapuram, Dec 3 (IANS) The Kerala government is waiting for permission from the union finance ministry and the Reserve Bank of India to help the Kerala diaspora to take part in chit funds, a Kerala minister said Monday.
Addressing reporters here after a board meeting of the state-owned Kerala State Financial Enterprises (KSFE), Finance Minister K.M. Mani said that an exemption to the Foreign Exchange Management Act is needed to allow the diaspora to take part in chit funds of the KSFE.
"This is mandatory for the diaspora to participate in chit funds and we expect to get the nod," said Mani.
Set up in 1969, the KSFE was created by the government of Kerala to provide an alternative to private chit fund promoters to bring social control over the chit fund business and to save people from the clutches of unscrupulous fly-by-night chit fund operators.
The KFSE's chit fund business expects to close the current fiscal with a profit of Rs.75 crore, up from Rs.66 crore in the last fiscal.
"The total turnover is expected to touch Rs.18,000 crore this fiscal, up from Rs.16,500 crore in the last fiscal," said Mani.
"We expect a minimum investment of Rs.5,000 crore annually from the diaspora if they are allowed to participate," said Rajendran.
The KSFE has 435 branches across the state. Mani said that given the profitability of the chit fund business, soon every village council in the state would have a KSFE branch.