HDFC Bank on Wednesday launched its Digital Loans against Mutual Funds (LAMF), in partnership with transfer agent CAMS. The Digital LAMF is available for resident Indians and for portfolios that are individual holdings.“Customers can now pledge mutual fund assets online and get overdraft limit set in their account in under 3 minutes,” HDFC Bank said in a statement.
With this product, customers can leverage their mutual fund (MFs) portfolio to avail funds for any contingencies or emergencies without liquidating their investments or stopping their regular investment plans/SIPs.
It is open to all HDFC Bank customers holding assets in at least one of the ten mutual fund houses registered with the CAMS. These ten fund houses together constitute about 60 percent of the total assets under management of the industry.Through a Digital Loan against Mutual Fund, you offer your MF units as collateral for the loan. The bank holds the mutual fund units as a security till you repay the loan amount. Your mutual funds will continue to earn returns, but you cannot sell them while you have pledged them to the bank. HDFC Bank is one of the first to offer a Digital Loan against Mututal Funds in partnership with transfer agent CAMS.Customers can now pledge their mutual fund assets online and get overdraft limit set in their account in under three minutes. Usually, a customer has to wait for five to six days to avail a loan against mutual fund holdings. Digital Loans against Mutual Funds is available for resident Indians and for portfolios that have individual holdings. According to a release by the company, this product can be availed through the HDFC Bank website in three easy steps.
With Digital LAMF, customers can design their own loan against mutual fund, choosing which assets from their portfolio they would like to pledge, calculate their overdraft limit eligibility against mutual fund, open a current account online instantly and get the money into the account, HDFC said.
Instant availability of money in account within minutes.Available against both Debt & Equity Mutual FundsCustomer retains mutual fund portfolio without liquidationFirst-time borrowers without credit history can access loansInterest applied only on amount utilisedAvailable across the country on HDFC Bank websiteNew Loans and Enhancements can be done online“With this product, we hope to reach out to customers in the tier 2 and 3 markets and bring them into the digital lending fold,” said Arvind Kapil, Group Head – Unsecured Loans, Home, and Mortgage Loans, HDFC Bank.