Debt Mutual Funds: ICICI Bank clients can get instant loan of up to Rs 1 crore against debt, mutual fund shares

has launched a facility that will allow its retail clients to obtain a loan of up to Rs 1 crore against their holdings in debt and equity mutual funds. Customers can avail this loan in the form of overdraft (OD) digitally without going to a branch and without submitting any physical documents. Called Insta Loans Against Mutual Funds, the facility was launched in partnership with Computer Age Management Services or CAMS, according to a press release from the bank. The facility is open to clients of the Bank holding units of mutual funds managed by CAMS.

With Insta Loans for Mutual Funds, pre-approved clients can select the mutual fund system and the number of units they wish to pledge, confirm the loan amount, and set the OD limit to l. using the bank’s online banking platform. Insta Loans against Mutual Funds is an extension of Insta LAS, an instant lending facility against shares, the bank said in its press release.

Rajesh Iyer, Head-Wealth, Private Banking and LAS, ICICI Bank said, “With this facility, clients can leverage their mutual fund holdings to instantly access funds. We believe that in these extraordinary times of the coronavirus pandemic, this offering will help both independent clients seeking funds for their business as well as salaried clients to overcome their personal cash flow needs. In addition, they will be able to benefit from this facility anytime, anywhere, using the Bank’s online banking platform. ”

This facility can be used by scoring a lien on existing mutual funds served by CAMS. It is available for Resident Indians and for Portfolios which are individual holdings.

Main characteristics

Here are some features of Insta loans against mutual funds, according to the bank’s press release.

  • Instant access to funds: Clients have access to instant liquidity by leveraging their existing mutual fund portfolio, without selling them.
  • Flexibility of mutual funds: The loan can be used against a wide range of debt and mutual fund equity programs managed by CAMS and approved by the Bank
  • Wide range of loan amount: The minimum loan amount is Rs 50,000 for MF loan and equity schemes. Maximum loan amount is Rs 1 crore for MF debt schemes and Rs 20 lakh for MF equity schemes
  • Competitive margin: Minimum 20 percent for debt and 50 percent for equity mutual funds
  • Advantage of OD; No fixed EMI: Since the loan is available as an OD, clients do not have to pay a fixed IME. They only have to pay interest on the limit used and for the number of days it was used
  • No entry fees: Customers have the option to repay the principal as they choose, with no entry fees

How to use the facility

  • Connect to Internet Banking: Connect to ICICI Bank Internet Banking >> Go to “Investment and Insurance” >> click on “Loan against Mutual Funds” >> Check pre-qualified eligibility >> select type mutual funds
  • Confirm the request on the CAMS portal: When redirecting to the CAMS portal, select the mutual fund system and the number of shares. Confirm the request via one-time password (OTP) authentication
  • Confirm Loan Amount: Confirm Loan Amount and Loan Advertisements on ICICI Bank Online Banking >> Complete FATCA >> Accept Terms & Conditions
  • Enter OTP: Enter OTP received on the mobile number registered with the Bank. Instantly, the OD account and limit are configured.
  • One can immediately start using the funds, once the above steps are completed.

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