Employees’ Provident Fund is the amount collected by deducting from the salary of a permanent employee of government offices, company and corporations.

Employees’ Provident Fund is the amount collected by deducting from the salary of a permanent employee of government offices, company and corporations. The government deducts 10% amount from their salary, contributes equal amount from their salary, and contributes an equal amount which creates the bigger funds. Such fund is collected and mobilized by an office which is called employee provident fund office. This office invests the collected fund in various productive sectors and provides a loan to the concerned employees at a reasonable rate of interest. The whole amount deposited in the account as a provident fund will be refunded after the retirement from jobs.

Functions of Employees’ Provident Fund

The following are the major functions of Employees’ Provident Fund: -

1. To collect the amount of provident fund from the permanent employees of government offices and corporate bodies.
2. To grant loans to the permanent employees for the purpose of constructing building and educating their children.
3. To grant loans to corporate bodies for the promotion of trade and industries.
4. To form and mobilize the capital in productive sectors.
5. To purchase shares and debentures for the promotion of different companies.
6. To provide different welfare schemes to the permanent employees.
7. To provide financial assistance to the government at the time of requirement.
8. To invest its funds in different projects for the purpose of earning profit like electricity project, commercial complex etc.

Citizen investment trust is a non-banking financial institution registered and operated under citizen investment trust act 2047. It is mainly established to avoid and expand investment opportunities to the public and encourage them for saving.

Citizen investment trust is a non-banking financial institution registered and operated under citizen investment trust act 2047. It is mainly established to avoid and expand investment opportunities to the public and encourage them for saving. It accepts the amount deducted from the monthly salary of employees working in the government offices, corporations and other organization. It is a voluntary deduction which can be made at a certain rate. The amount collected by way of voluntary deduction is invested in productive sectors. Thus, as financial institutions, it collects a sum, mobilizes into various sectors, and contributes for economic development. It provides various economic facilities to the employee after their retirement.

Functions of Citizen Investment Trust

The functions of Citizen Investment Trust are grouped under three main heads as stated below: -

1. Saving mobilization:
   
   • To operate various types of mutual fund schemes and citizen unit schemes.
   • To operate various types of retirement schemes such as pension fund, gratuity fund and insurance fund.
   • To operate investors account scheme.
2. Financial support and investment:
   
   • To invest in the shares and debentures of corporate organizations and government bonds.
   • To provide term loan and bridge loan to corporate organizations.
   • To provide loan for buying and selling securities.
3. Capital market service
   
   • To issue various types of securities and to provide sales management services.
   • To provide underwriting services.
   • To provide brokerage and consultancy services in capital market.

The financial institutions established by the financially poor people for their common benefits are called financial cooperatives.The main aim of such institution is to increase the income capacity of the people and their members who are economically weak.

According toHeney Calvert,“A co-operative is an association wherein persons voluntarily associate together as human beings on the basis of equality for the promotion of economic interest of themselves.”

From the above definition, it is clear that co-operative institutions are the voluntary associations of individuals which accept deposits from their member and provides loan to the members. The cooperatives institutions are also treated as financial institutions.

The following are the major functions of Financial Co-operative Institution: -

1. To accept deposits under different schemes from its members.
2. To grant loans to its members against the securities or group guarantee.
3. To encourage the saving habit of its members by allowing comparatively higher rate of interest.
4. To provide money transfer services as an agent of Remittance Company.
5. To provide co-operative education to its members.
6. To provide different kinds of welfare services to its members.
7. To mobilize the small amount of capital of urban, sub-urban and rural areas.
8. To save its members from the exploitation o0f capitalists in rural areas by fulfilling the financial needs at reasonable rate of interest.
9. To promote small scale industry, cottage industry and agricultural sector of rural areas through financial and technical assistance.
10. To contribute to the national unity by promoting the feeling of mutual help and trust among the members.

The financial institutions established by the financially poor people for their common benefits are called financial cooperatives.