Various schemes of KSFE that offers financial assistance such as loans or advances can only be availed against the security provided by the customer. Security is defined as, “anything, such as salary recovery undertaking, landed property, deposit receipt etc., that is deposited or pledged as a guarantee for the fulfillment of an undertaking regarding the repayment of an advance, along with interest thereon, to be forfeited in case of default”. The various types of securities accepted by the KSFE for its different schemes are the following:
Personal security is accepted for future liability upto Rs.12-lakhs. Employees of Central/ State/ Quasi-Government Departments/ Undertakings, employees of Government / Aided schools/ Plus two schools, colleges and employees of Nationalised/ Scheduled Banks and certain Co-operative institutions are generally accepted as sureties by the Company for its various schemes.
1. SALARY AND MINIMUM SALARY
a) “salary” for this purpose include Basic pay plus D.A. (Dearness Allowance) and adhoc DA/increase and P.P (Personal Pay), if any.
b) “Minimum Salary”
Only full-time permanent employees who are drawing a minimum net-salary of Rs.5000/- will be accepted as sureties/guarantors.
2. CLASSIFICATION OF SURETIES
a) “SREG” (Salary Recovery Enforceable Group)
b) “SRNEG (Salary Recovery Non-Enforceable Group)
3. Salary Requirement Norms
a) SREG employees:The SREG surety (s)/guarantor(s) offered should have a minimum/combined salary of 10% of the future liability.
b) SRNEG employees:
The SRNEG surety(s)/guarantor(s) offered should have a minimum/combined salary of 12.5% of the future liability.
c) Combination of Sureties/guarantors
When SREG employee and SRNEG employee are jointly offered as sureties/ guarantors they should have a combined minimum salary of 12.5% of the future liability.
4. General Conditions.
(a) Sureties should be permanent residents of and working in Kerala State.
(b) They should be permanent/ officiating full time employees.
(c) The sureties should have at least 6 months service left for retirement after the termination of the period of liability.
SREG and SRNEG employees who are chitty subscribers/Loanees can avail of the facility of self surety/guarantee, up to a liability of Rs.4,00,000/- in all schemes, with minimum net-salary of Rs.5000/- on the condition that total recovery of the applicant doesnot exceed 60% including the monthly gross instalment amount of the chitty/loan/advance applied for. However for future liability of chitty, upto Rs.5,00,000/- ,personal surety is accepted on the basis of salary certificate as well as marks as per score card.
Single surety is accepted in all the schemes:
(a) Upto a liability of Rs. 4,00,000/- if the principal debtor is unemployed, provided the surety is from SREG with minimum net-salary of Rs.5000/-.on the condition that total recovery of the surety doesnot exceed 60% including the monthly gross instalment of the chitty/loan/advance applied for.
(b) Upto a liability of Rs.8,00,000/-, where the principal debtor is from SREG, provided both the principal debtor and surety have separate minimum net-salary of Rs.5000/-.on the condition that total recovery of the principal debtor doesnot exceed 60% including the monthly gross instalment of the chitty/loan/advance applied for.
Fixed deposits with Nationalised Banks, Scheduled Banks, District Co-operative Banks, Co-operative Banks or any other Banks, having deposit insurance coverage and fixed deposits with KSFE. Ltd., either in the name of the subscriber/applicant or in the name of another person will be accepted as security for all our schemes.
Short Term deposits with KSFE. Ltd., either in the name of the subscriber/applicant or in the name of another person will be accepted as security for all our schemes.
LIC Policies, the surrender value of which, are equal to the future liability of the loan/chitty can be accepted as security. The LIC policy accepted as security in such cases can be in the name of applicant/subscriber or in the name of spouse or in the name of any other person. In such cases the policy should be assigned in favour of the company and the policy holder should be a co-bounden in the agreement.
Government Securities and Bank Guarantee can be accepted as valid security. The Bank Guarantee should cover an amount equal to one instalment more than the future liability. Also it should be valid for a period not less than three months after the termination of the liability.
The Passbook of non-prized chitties can be accepted as security for the future liability of schemes.
NSC will be accepted as valid security, on the following conditions:
At the time of acceptance, the issue price (face value) of the NSC’s (VIII issue), should cover the future liability, ie. principal plus interest in case of advances and sum total of future instalments in the case of chitties. The interest for the loan amount is to be calculated till the maturity of the instrument or the remaining period of loan, whichever is longer.
Forms prescribed by the Post Office are used for noting the lien.
The future liability for which Kisan Vikas Patra can be accepted as security is determined as follows:
1. In case the Kissan Vikas Patra is offered as security before the expiry of 30 months after the issue of the same, the certificate will be accepted for a future liability not exceeding 75% of the value of the certificate (i.e, purchase price).
2. If the Kissan Vikas Patra is offered as security after 30 months (i.e, expiry of lock in period) of the issue of the same, the certificate will be accepted as security for future liability worth the premature closure value of the certificate on the date of acceptance of the same as security.
The NRI, NRO, FCNR and NRNR deposits can be accepted as security to our various schemes, provided.
a) The deposit receipts are properly discharged and company’s lien noted on it.
b) The Bank, in which the deposit is kept, agrees to close it and make required payment to KSFE. even before maturity, on demand.
Property security inside the State of Kerala can be accepted as security, provided the title of the owner over the property is clear. The following documents will have to be presented while submitting property as security.
- Title Deeds and prior documents in original (for the past 13 years)
- Encumbrance certificate for the past 13 years
- Land Tax Receipt for the current year
- Building Tax Receipt, if there is a building on the property.
- Possession and enjoyment certificate
- Location Certificate and Sketch of the property.
Norms for our Schemes
|a.||Chitty||10% of future liability (instalments to be remitted) in the case of SREG, 12.5% of future liability in the case of SRNEG and SREG/SRNEG combination.|
|b.||New Chitty Loan||10% of loan amount in case of SREG, 12.5% of future liability in the case of SRNEG and SREG/SRNEG combination|
|c.||Consumer/ Vehicle Loan||10% of future liability (Advance + Finance charge) in the case of SREG, 12.5% of future liability in the case of SRNEG and SREG/SRNEG combination|
|d.||Trade Financing Scheme||10% of loan amount of SREG sureties.|
|e.||Reliable Customer Loan||The amount to be secured under RCL will be the future liability i.e. principal plus interest. There are no separate security norms.|
The security norms in vogue are applicable. However mutual surety will not be accepted. In the case of immovable property immovable property valuation is half times of the market value..
The applicant should execute a loan agreement on stamp paper worth Rs.200/- in the prescribed format.