The digital alternative will reduce time taken to pass a loan to a up to three minutes as against the current time of up to six days, he said, adding that even getting the money through redemption takes up to three days.
HDFC Bank is clocking loan sales of Rs 1,000 crore per month through digital platforms across products and expects it to go up further with the launch of a an online loan against mutual funds, a senior official said. The private sector lender launched the new product offering today in association with CAMS, which controls 65 per cent of the market share. The lender, which has digital platforms extending personal loans and loans against securities, is notching sales of over Rs 1,000 crore a month at present, its group head for unsecured loans Arvind Kapil told reporters. It has an approved credit limits of Rs 10,000 crore on the loans against mutual funds (MFs) and insurance policies, he said, adding that the newly launched digital offering will grow its portfolio multiple times due to the convenience, without giving an exact quantum targeted.
The digital alternative will reduce time taken to pass a loan to a up to three minutes as against the current time of up to six days, he said, adding that even getting the money through redemption takes up to three days. An investor can borrow up to 50 per cent of the value of her MF holdings in both the debt and equity segments and will be charged an interest rate of up to 11 per cent.
The minimum loan amount is fixed at Rs 1 lakh, while there is a limit of Rs 10 lakh for loans on equities and Rs 1 crore for debt mutual funds. The customer needs to have a savings account with the bank to avail the loan and fill up certain forms to get a loan approval. The approved amount reflects in a specially created current account as an overdraft and the interest charges start with the draw-down, the bank said.
As an introductory offer, the bank will be charging a processing fee of Rs 1,499 per customer. At present, it has 10 MF houses for which the loans can be availed. The digital alternatives are being launched under the bank’s recently adopted “blue ocean” strategy of exploring untapped areas for selling loans digitally.