Kerala's banking sector had its roots in local 'kuris' and when RBI started regulating banks, their numbers came down from 163 to a mere handful by 1970s. However, during the same time, Kerala witnessed a mushrooming of kuri companies - especially in Thrissur, which could be called the chit fund capital of India as one among every six chit funds in India is from Thrissur.
Two decades ago, chit funds from Kerala had shifted their registered offices to other states as the state legislation was tough. "They first moved to Bengaluru and when Karnataka started implementing the Central Chit Funds Act, they shifted to Faridabad," said Mathew Puthukattukaren, director, Dharmmodayam, which was registered in 1919 as a company with the then Cochin state.
"Those companies operating out of Faridabad had opened a namesake office. According to local rules, they were able to register the companies under the Local Shops Act, just like any other shop," he said. This reached such a farcical level that few years ago a British newspaper Daily Mail had reported that a two-storey building in sector 7 of Faridabad was home to 130 chit funds from Kerala.
Once Haryana was brought under the central act in 2012, the exodus of registered offices reversed. According to the documents of the ministry of corporate affairs, by the end of October 2014, India had 5,836 chit fund companies and 2,148 were registered in Kerala. Thrissur had the maximum : 1,090 firms.