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Kerala eases procedures for expat savings scheme

State chief minister to launch chit fund in UAE by end of August or early September

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Kerala finance minister Dr. T.M. Thomas Isaac’s video conference with the media in Dubai.
Gulf News

Dubai: Kerala is easing the procedures for expats from the south Indian state to join a government savings scheme to be launched in the UAE soon, the state’s finance minister announced on Tuesday.

In a video conference with the media in Dubai, minister Dr T.M. Thomas Isaac said the scheme targeting non-resident Keralites across the world will be first launched in the UAE either by the end of August or early September, as per the availability of the chief minister Pinarayi Vijayan.

The savings scheme is managed by state-run Kerala State Financial Enterprises (KSFE) and is called KSFE Pravasi Chitties — or KSFE Expat Chit Fund.

Journalists attend the Kerala finance minister Dr. T.M. Thomas Isaac’s video conference in Dubai. Journalists attend the Kerala finance minister Dr. T.M. Thomas Isaac’s video conference in Dubai.

A chit fund is a traditional savings scheme where a group of subscribers puts in a certain amount of money every month for a specified period, and each month the subscribers, by turn, are entitled to a prize amount. Usually the subscriber, who bids for the lowest amount, wins the monthly chit.

The money raised through the chit fund will be passed on to the Kerala Industrial Infrastructure Fund Board (KIIFB), which will then utilise the money for infrastructure development.

Though it is designed to be an online scheme through the website www.pravasi.ksfe.com and the mobile app ‘KSFE Pravasi Chit,’ Isaac said the government is now working with money exchange houses to give manual options for sending money to the scheme so that it is more popular with those who cannot access online services.

“We have called for a tender. We are planning to keep the lowest service fee for these transactions. We are trying to get a concessional rate of Dh5 or below,” he said.

Exchange firms in the UAE usually charge between Dh10 to Dh25 for sending money to India.

He said the government is looking into avoiding the requirement of the ID number with the Non Resident Keralites Affairs (Norka) Department for registering with the chit scheme.

Also it has been decided to accept expats’ fixed deposits, gold and land as collateral from the winners with verifications done in a time-bound manner, he said.

He said the scheme will be made completely Sharia-compliant soon. Of the three conditions to make it Sharia-compliant, two have already been fulfilled, he said.

The state will use the fund generated from this only for development of the infrastructure like cultural complexes and roads, making it a halal financial investment scheme and there is no interest involved in the scheme, he pointed out.

To meet the last requirement of avoiding the element of speculation in the auctions, he said groups of subscribers will be asked to consensually choose the winner based on the needs of the bidders.

Isaac said he will be visiting the UAE in the first week of August for making arrangements for the launch of the scheme.

Once launched, subscribers can make payments ranging from Rs2,500 to Rs40,000 as monthly premiums.

Dr P.V. Unnikrishnan, director of KSFE, said the team behind the scheme is addressing certain teething problems that cropped after the launch of the online registration in June. The mobile app is now available for Android users only. It will be made available for iOS users soon, he said.

“We have also made an arrangement with WhatsApp to make a database of all the subscribers so that we can send the OTP [One Time Password] to the subscribers via WhatsApp as well as SMS.”

He said this step was taken since there had been complaints of subscribers not receiving OTPs through SMS. So far, 6,000 people have registered and 30,000 are expected to register before the launch of the scheme. The government expects 150,000 subscribers to raise Rs100 billion through the scheme in the next five years.

The scheme also offers insurance coverage. “In case of failure in the remittance of [premium] instalments due to accident, death or permanent disability, KSFE will take care of the remaining payment through insurance coverage facility. There is also a provision for the subscriber to link the chitty with pension fund/scheme,” the KSFE website said.

Kerala to help amnesty-seekers

The government of Kerala will provide all required support for expats from the state seeking amnesty in the UAE from August, the state’s finance minister Dr T.M. Thomas Isaac said on Tuesday.

In reply to a question by Gulf News during a video conference with the media in Dubai, the minister said the government will announce its plan to support amnesty-seekers soon.

“After discussing with the chief minister, we will announce the plan soon … before the start of the amnesty itself,” he said.

During previous amnesties, the Kerala government had actively supported amnesty-seekers and provided free air tickets to many in need.

The minister said there are sufficient funds with the government to help such people in a better way now.

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