Secure your dream investments.
Opt for Loan Against Shares, Mutual Funds, Bonds and Debentures
Interest rates & charges
Most Important Terms and Conditions (MITC)
Loan Against Shares, Mutual Funds, Bonds and Debentures : Benefits
Loan Against Shares, Mutual Funds, Bonds and Debentures : Features
- Minimum Amount – Rs. 1 Lakh
- Maximum Limit per Individual as under:
- Overdraft Facility
- Pay interest only on utilised amount
|Shares/ Equity Oriented MF in Demat Form/ Debentures and Bonds in Demat Form||Rs. 20 Lacs|
|Equity Oriented MF in Unit Form||Rs. 10 Lacs|
|Debt Oriented MF in Unit/ Demat Form||Rs. 5 Crore|
Loan Against Shares, Mutual Funds, Bonds and Debentures : Eligibility
- Any Individual (Resident & Non-Resident) including staff members engaged in gainful activity having regular source of income.
- Two or more Individuals
- The securities can be held in any one’s/ joint name. In case of Joint name, all the holders must be applicant/ co-applicant.
- If co-applicant is not holder of security, he/she should be close relative of holder.
- At least one applicant/ co- applicant should be engaged in gainful activity having regular source of income.
- The total outstanding per individual should not to cross the limits mentioned under ticket size from entire Banking system.
Loan Against Shares, Mutual Funds, Bonds and Debentures : Interest rates & charges
|Product||Conditions||Repo Rate + Spread||Effective Rate of Interest|
|Loan against Securities||
Repo Rate + SpreadFrom BRLLR + SP + 0.50% to BRLLR + SP + 1.85%
Effective Rate of Interest0.00%
|Cibil Score||Applicable rate of interest|
|800 & above||BRLLR + Strategic premium + 0.50%|
|771 & above but less than 800||BRLLR + Strategic premium + 0.85%|
|726 & above but less than 771||BRLLR + Strategic premium + 1.10%|
|701 & above but less than 726||BRLLR + Strategic premium + 1.35%|
|Less than 701||BRLLR + Strategic premium + 1.85%|
|(-1)||BRLLR + Strategic premium + 1.35%|
New Account – 0.35% of sanctioned amount
Minimum : Rs 500, Maximum : Rs 2500 (Rs 1000 for Baroda e-trade account holders)
Renewal /Enhancement – 0.35% of sanctioned amount
Minimum: Rs 250
Maximum: Rs 1250 ( Rs 500 for Baroda e-trade account holders)
Service Charges (Excluding GST) w.e.f. 20.06.2019
Baroda Advance Against Securities Rs 500/-
(No other charges)
Staff/ Ex-Staff: No Charge
Loan Against Shares, Mutual Funds, Bonds and Debentures : Documents Required
- Identity Proof
- Address Proof
- Income Proof
- Security Details
Loan Against Shares, Mutual Funds, Bonds and Debentures : Most Important Terms and Conditions (MITC)
- 21 to 70 years
- Minimum/ Cut-off CIBIL score of all applicants should be 701
- Applicants having score of (-1)/(0) will also be eligible
- 2% above sanctioned rate will be applicable on overdue amount
The borrower will not be able to reclaim any securities which are once invoked
|LTV Breach||Timelines to sell|
|For Equity Shares, Equity Mutual Funds & Alternate Investment Funds||For Debt Funds, Bonds and Debentures|
|Above 50% & upto 60%||Above 75% & upto 80%||Maximum within T+4th Day of LTV Breach|
|Above 60% & upto 65%||Above 80% & upto 85%||Maximum within T+4th Day of LTV Breach|
|Above 65%||Above 85%||Maximum within T+2nd day of LTV Breach beyond 65% or 85%|
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What is LAS?
LAS stands for "Loan against security”. Securities include equity shares, mutual funds units (both equity and debt), etc. A loan against security is provided after the bank’s approval and verification.
What is meant by a loan against shares?
A loan against shares is applying for a loan by pledging one's securities in the favour of a bank.
Is a loan against securities a good idea?
Yes, a loan against securities is a good option as you can avail yourself of cash without selling your securities. Additionally, the repayment process is quite transparent and easy.
What is the interest rate for loans against securities?
It varies as per your CIBIL score.
Can I get a loan against my shares?
Yes, you can avail loan against shares, if you hold shares that are as per the bank’s approved list.
For more details, contact the Bank of Baroda branch in your vicinity.
How much loan can I get against my shares?
You can avail maximum loan of Rs. 20 lakhs against shares, providing the shares are in DEMAT form and are included in our approved list.
Is it good to take a loan for investment?
A loan against security is not provided for investment purposes. It is solely provided to meet the contingency needs.
What is the detailed procedure for applying for a loan against security?
A loan against security can be availed by a customer for meeting personal/contingency needs.
The client must approach any Bank of Baroda branch. The branch will check the securities available with you, and accordingly inform them about the limit which can be granted as per the market value of the security.
If you have the equity shares, first you need to pledge the securities in the bank's loan against the security DEMAT account.
CDSL 1301870000469054, NSDL IN30087010471981, branch will take other relevant documents along with PMR & for them to the corporate office for further processing.
In the case of mutual funds, the customer will have to submit consent in investor letter format and submit it to the concerned branch which in turn will forward it to the corporate office for further processing.
Who can apply for a LAS facility?
1. Any individual (resident & non-resident), including staff members engaged in the gainful activity, who have a regular source of income can apply for a loan against securities (LAS).
2. Two or more individuals
a. The securities can be held in any by one or more applicants. In the case of a joint account, the name of all the holders must be of the applicant or co-applicant.
b. If the co-applicant is not the leader of security, he/she should be a close relative of the holder.
c. At least one applicant-applicant should be engaged in the gainful activity and have a regular source of income.
d. The total outstanding per individual should not cross the limits mentioned under ticket size from the entire banking system.
a. Applicants can have a DEMAT account with any depository participants.
b. List of close relatives: spouse, father, mother (including stepmother), son (including step-soon), son’s wife, daughter (including step-daughter),
daughter’s husband, brother/sister (including stepbrother/sister), brother’s
wife, sister (including stepsister) of spouse, sister’s husband, brother (including stepbrother) of a spouse.
What is the age limit for availing of a loan?
It ranges from 21-70 years.
Can I take a loan against govt bonds?
A loan against sovereign gold bonds is available, providing Sovereign Gold Bond (SGB) is listed and in the DEMAT form.
What is the minimum & maximum limit?
The minimum limit is Rs. 1 lakh and the maximum learned is Rs. 5 crores.
For equity share res. The maximum limit is Rs. 20 lakhs; for mutual funds (equity) maximum limit is Rs. 10 lakhs. If mutual funds (equity) are in DEMAT form, then a maximum of Rs. 20 lakhs can be granted.
What are the margins under various categories?
The margin loan against equity shares & equity funds is 50%. Whereas the margin in loans against debt securities is 25%.
What is the duration for which the loan is granted?
The loan is granted for 12 months. It can be extended further after satisfactory conduct post review.
Can a loan be settled before the completion of 12 months?
Yes, if the borrower settles the overdue before 12 months, the loan account will be closed.
In how much time my loan will be processed?
If all the documentation part is done and the securities are lien marked pledged, the loan will be disbursed within 2-3 working days.
Why should one go for a loan against a mutual fund?
If anyone needs funds to meet their contingency needs, without selling their mutual funds units, then they can avail loan against a mutual fund.
How much loan can I get on mutual funds?
Have a look at the list below.
- For equity MF in DEMAT – Rs. 20 lakhs
- For equity MF in Non-DEMAT accounts – Rs. 10 lakhs
For debt MF – the maximum limit of Rs. 5 crores.
How do loans against mutual funds work?
One's daily drawing power will be pushed based on the market value of the mutual fund, keeping the margin aside.
How do I apply for a mutual fund loan?
Please visit the nearest Bank of Baroda Branch or take a loan against mutual funds online.
(embed “online” with the link of the page)
Can mutual funds be used as collateral?
Yes, mutual fund units held by you can be used as collateral.
Can we take a loan on debentures?
Yes, the Bank of Baroda provides loans on debentures and bonds in DEMAT form.
Are debentures assets or liabilities?
Debentures are an asset to the customer.
Is a loan granted against any equity share or mutual fund?
For a loan to be granted the script has to be an under banked-approved list of securities.
For a mutual fund to qualify, funds have to be 1 year old with 100 crores AUM.
What if the market value of my securities goes up or down?
If the market value of the securities goes down, automated e-mails will be triggered to your registered mail ID. Then, you will have to pay a margin amount or pledge additional security.
In another case, if the market value of securities goes up, you can ask for a limit increase under the maximum limit purview.
Is email id mandatory for a loan account to be opened?
Yes, it is a mandatory requirement.
What is the nature of the credit facility?
The limit will be given in form of an overdraft facility only.
Is the facility available for NRIs?
Yes, the facility is extended to NRIs as well.
What are the charges that the customer has to bear?
What if bonus shares are issued?
In case of corporate action of any bonus issue, the new shares/ unit of mutual funds will be pledged, and the borrower may request an additional limit or withdrawal of pledge on these shares, provided margin/exposure norms are complied with as of the date of such request.
The securities are in my wife's name, can the Ioan be granted in my name?
Yes, a loan against security can be granted, but the wife has to be a joint holder.
If the market value of my securities increases, can I request for partial release of securities?
Yes, partial withdrawal of securities is allowed provided sufficient margin is available even after the release of securities that have been requested by you.
What if the market value of my shares decreases, will the bank sell my securities immediately?
The bank will never sell the securities without informing you.
You will be given some pre-defined timelines based on LTV up to which you can normalize your account by paying margin/pledging additional securities.