The
loan amount that can be sanctioned depends on two factors:
the extent of funding on a particular stock and the price
(called the base price) considered by the lender for calculating
the value of the shares.
The
Reserve Bank of India (RBI) allows banks to lend up to 50
per cent of the value of demat shares . However, banks can,
and do, fix their own limits with respect to the extent
of funding within that range. Generally, demat shares get
you a larger loan amount, in a much faster time, at lesser
rate of interest and at smaller processing fee. Every lender
has an approved list of securities that he lends against
and this list varies from one lender to the other. There
are other conditions that lenders apply on equity loans.
Loans
against Shares offers you the much needed instant liquidity
while still retaining ownership.
You
dont have to sell your investments to enchase their value.
Loans against Shares, now you can avail loan on your shares
while still retaining them. That’s not all; you can
continue to avail entire shareholder benefits such as dividends,
bonuses, rights etc. All you have to do is pledge your shares
and avail the loan determined on the basis of the shares
pledged by you.
So,
you keep your carefully built portfolio intact and get the
benefit of getting cash against it for any purpose.
Loans
are granted only against the list of approved scripts, as
determined by Banks.
Key
Features of Loans against Shares
Attractive
Interest Rates.
Speedy Loan
Approvals.
Minimal
Documentation.
Quick processing
LIMITATION
The loan is extended against shares of eligible companies
and, in a few cases, units of reputed open-ended mutual
funds.
Only fully
paid-up shares, in the lender’s approved list of securities,
are accepted.
Shares held
in the name of minors, NRIs and companies are generally
not accepted.
Loans against
mutual fund units are based on their NAV value
Passport
