Loan Against Mutual Funds

Loans against units of mutual funds are granted only to those units that are listed in the stock exchange or for those units for which repurchase facility is available. If there is a lock in period in the scheme then the scheme should have completed the minimum lock in period stipulated. The amount of advance is linked to the net asset value/repurchase price or the market value whichever is less and not to the face value. Banks ensure that the advance should not be granted for subscribing to or boosting up the sales of another scheme of mutual funds or for the purchase of shares/debentures/bonds. Compared to loans against shares, the extent of funding against mutual funds is generally lower at 40-50% of the base NAV.

  • Facility in the form of overdraft against list of approved securities
  • Facility upto 75% of security value
  • Interest charged on actual amount utilized
  • No EMI or post dated cheques required
  • No pre payment charges
  • Cheque book facility
  • Term Loan facility available against select securitie

1]Loan Against Mutual Fund – Resident Indians

Applicant should be above 18 years of age at the time of application

2]Loan Against Debt Mutual Fund – Resident Indians,  HUF, Sole

 Proprietorship, Partnership firm, Pvt. Ltd. Company

1]Proof of identity -Voter’s ID card or driving license or PAN card or employees ID card or government department ID card

2]Proof of income- Latest salary slip showing all deductions or Form 16 along with recent salary certificate / IT returns of last 2 years

3]Proof of residence -Bank account statement or latest electricity bill or latest mobile or telephone bill or latest LIC policy or insurance premium receipt or existing house lease agreement

Bank statement or Pass Book Last 6 months

Holding Statement Latest statement of holding for mutual funds

Guarantor form Optional. (Mandatory in case of joint holding)

Pledge Creation form Mandatory for creation of pledge

Facility Tenure

Overdraft facility is granted for 12 months. This is reviewed and renewed at annual rests.

 

Penalty for early closure

Nil.

 

Other Conditions

Bank reserves the right to reject any application / renewal without assigning reasons thereof. It shall be the sole right of the Bank to consider the proposal on case to case basis after taking into consideration, the credentials/credit worthiness of each of the customers

No loan under this scheme is granted for investment in capital market instrument or for speculation purpose

The overdraft facility shall be disbursed / renewed only after all the required documentation and pledge creation formalities are complete.

The margin requirement will be reviewed regularly. In event of any volatile fluctuations in the prices of the units, the client shall make good the shortfall, if any, within four days, failing which the security will be enforced.

The applicant will undertake to inform the Bank as and when there is a change in address or employment

The terms and conditions mentioned above and elsewhere under the scheme are subject to modification from time to time solely at Bank’s discretion.

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