HDFC Bank today launched its Digital Loans against Mutual Funds (LAMF) in partnership with transfer agent CAMS. The bank customers can now pledge mutual fund assets online and get overdraft limit in under 3 minutes. They can also avail of this product through the HDFC Bank website in three easy steps, said the bank in a press release.
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. The facility is available for resident Indians and for portfolios that are individual holdings.
The Bank has collaborated with CAMS to create a seamless customer experience. 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% of the total assets under management of the industry. These fund houses are Aditya Birla Sun Life Mutual Fund, DSP Blackrock Mutual Fund, HDFC Mutual Fund, HSBC Mutual Fund, ICICI Prudential Mutual Fund, IDFC Mutual Fund, Kotak Mahindra Mutual Fund, L&T Mutual Fund, SBI Mutual Fund and Tata Mutual Fund.
Both equity and debt schemes are eligible for loans.
Currently, a customer has to wait for 5-6 days to avail a loan against mutual funds. Even redemption of MFs takes couple of days for the funds to be transferred to the customers' account. “With this facility , 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; all in a matter of minutes,” said the bank.
Key benefits of Digital LAMF:
• Instant availability of money in account within minutes.
• Available against both Debt & Equity Mutual Funds
• Customer retains mutual fund portfolio without liquidation
• First-time borrowers without credit history can access loans
• Interest applied only on amount utilised
• New Loans and enhancements can be done online
