Money & Banking

Kerala Govt NBFC wants to go pan-India

V Sajeev Kumar NS Vageesh Thrissur | Updated on January 23, 2018




Kerala State Financial Enterprises looking to double business in 5 years

The Kerala State Financial Enterprises (KSFE), a non-banking company fully-owned by the Kerala Government, has asked for regulatory approvals to expand its operations outside the State.

It also needs some enabling provisions in other laws that will allow it to recover money lent to borrowers.

Principally, it is awaiting nod from the Finance Ministry to enable it to use the Sarfaesi (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act for recoveries in its lending operations.

For this, it will have to be notified as an institution of public interest.

The matter is in an advanced stage of discussion with the Centre and the institution is hopeful of getting the necessary approvals soon.

The Sarfaesi Act would empower KSFE to attach and auction the property of defaulters without having to go through an elaborate court procedure.

In Kerala, it does not have a problem with recovery, since its dues enjoy the status of a revenue recovery, being an arm of the State Government. “With the Sarfaesi Act in place, we will be able to branch out and go outside Kerala,” P Rajendran, Managing Director, KSFE, said.

This would enable the company to expand its branch network to 1,000 from the present 530 branches. Eyeing a 25-30 per cent annual growth, KSFE hopes to double its business to ₹50,000 crore in the next five years from ₹26,000 crore now, in the process becoming a one-stop financial supermarket.

As part of these plans, KSFE will spread out and establish a presence in every panchayat as announced in the Budget presented two years ago, PT Jose, Chairman of KSFE, said.

KSFE is currently serving about 15 lakh customers and there is enormous potential for further growth, he said.

In the second phase of expansion, he said, KSFE will be rolling out white-label ATMs in almost all major urban and semi-urban branches. This will begin from January next year.

The company is also in the process of developing a core software package suitable for chit operations in all the branches, which will be implemented from October, Jose said.

Published on August 14, 2015

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