Getting digital loans against mutual funds (MFs) within a couple of minutes seems to have become a reality now. In a tie-up with CAMS, HDFC Bank today announced the launch of its digital loans against mutual funds (LAMF), which the bank claims to be a first in the country. With this, people can pledge their mutual fund assets online and get the overdraft limit set in their account withing three minutes.
According to the bank, Digital LAMF will help customers leverage their mutual fund portfolio to avail funds for any contingencies or emergencies without liquidating their investments or stopping their regular investment plans or SIPs. This product is available for resident Indians and for portfolios which are individual holdings.
One can avail this product through the website of HDFC Bank in 3 easy steps through Net banking:
# One has to log in to myCAMS via the website of HDFC Bank and select the MFs one would like to pledge from one’s portfolio
# Then one has to click on loan terms and conditions
# One is then required to input one-time password (OTP) and overdraft will be ready to use in one’s account
HDFC Bank, in a press release, said that it has partnered with CAMS to create a seamless customer experience. The product can be availed by all HDFC Bank customers who hold assets in at least one of the 10 MF houses registered with CAMS. These 10 fund houses together constitute about 60 per cent of the total assets under management of the industry.
It may be noted that HDFC Bank had launched ‘Digital Loans against Securities’ last year. After its success, it has now automated the entire process for ‘Digital loans against mutual funds.’
The bank says that today people have to wait for 5 to 6 days to avail a loan against MFs. Even redemption of mutual funds takes a few days for the funds to be transferred one’s account. With Digital LAMF, one can design one’s own loan against MF, choosing which assets from one’s portfolio one would like to pledge, calculate one’s overdraft limit eligibility against MFs, open a current account online instantly and get the money into the account — all in a matter of minutes.
Key benefits of Digital LAMF:
# Instant availability of money in one’s account within minutes.
# Available against both Debt & Equity MFs
# Customer retains MF portfolio without liquidation
# First-time borrowers without credit history can access loans
# Available across the country on HDFC Bank website
# New Loans and Enhancements can be done online