ICICI bank is India’s largest private sector bank with asset base of a whopping USD 109 billion! It has a well entrenched network of 4450 branches and 14,354 ATMs across India. Founded in 1994, ICICI has registered exponential growth due to its impeccable services, professional expertise and unparalleled initiatives in customer service. ICICI group provides banking and other financial services like investment, wealth management, international finance, corporate services and loan products.
ICICI offers following categories of loan products apart from loan against securities to its customers:
- Home Loan
- Car Loan
- Personal loan
- Gold loan
- Commercial business loan
- Other loans under Pradhan Mantri Mudra Yojana and Stand-up India scheme.
Eligibility for Loan Against Securities
Following are the distinct eligibility criteria for availing loan against securities:
- Applicant should be of minimum 21 years of age and maximum 75.
- Applicant should have a valid and active landline telephone subscription either at residence or office.
- Loan available only against approved product, scrips and shares.
- Following securities are eligible for pledging to enjoy this loan
- Mutual fund Units: Only individuals can apply against equity oriented funds. For debt funds including Fixed Maturity plans and exchange traded funds HUF, companies, partnership firms and sole proprietorships can apply
- DEMAT Shares: Only individual are allowed to apply.
- Life Insurance Policies: Individuals, HUF, companies, partnership firms and sole proprietorships can apply
- Government of India Bonds: Only Individuals and HUFs are eligible
Salient Features of the Loan Against Securities
Kindly note some important features of this loan enumerated below:
- In case of shares and mutual funds the margin of 50% is given which means that if you want to raise INR 1 lac then shares worth 2 lacs of NAV are to be pledged.
- As the NAV of shares keeps on fluctuating, the revaluation for loan amount of considered every week on Friday. In case of some scrips or increased market volatility this review may be done more frequently
- An overdraft account is opened in favour of the borrower from which he/she can borrow as per the limit and need. IF the NAV of the portfolio pledged increases then the upper limit of the loan are revised upwards and if it goes down, then so does the loan limit.
- Minimum loan amount under this scheme is Rs. 50,000 across all securities however maximum ceiling differs from security to security. For mutual funds and shares, the upper limit is 20 lacs whereas life Insurance policy and Bonds command an enhanced limit of Rs. 5 Crores.
Loan Processing and Various Charges
Let us now take you through the process of loan sanction and disbursal
- The applicant needs to file duly filled form and required documentation to the bank which includes loan agreement and account opening documents. The standard documents to be produced are identity proof, address proof, bank statements, Income Tax Return, audited financial statements like profit & loss account and Balance-sheet.
- After payment of non-refundable loan processing charge of Rs. 3500 or over Rs. 5000 depending on your case, the processing of loan begins.
- Once the loan is processed and sanctioned, a current account with upper limit determined according to the portfolio of scrips, shares and securities pledged is opened in the name of customer.
- The disbursal is from this account in form of overdraft.
Each time the loan is renewed, an annual fee of Rs. 2500 + service tax is levied. There are no prepayment charges but penal interest for borrowing over the limit are applicable rate plus 6% and other statutory taxes on such charge. In case of default, the pledged securities can be sold by the bank to recover outstanding loan amount. All brokerage and other expenses for effecting this recovery are charged to customer on actual.
These were the broad features and eligibility criteria for availing loan against securities from ICICI bank. You can apply online or visit their nearest branch to secure this great loan product. Their portal helps you find the nearest branch and contact numbers of the customer helpdesk, whom you can approach in case of any doubts and clarifications.
We at www.letzbank.com bring you various categories of loans from ICICI Bank. This institution has been one of the most trusted names in the banking and lending sector for decades now. Its dedication to client service and innovative products is bound to keep ICICI at top of its game. You can also compare offers from ICICI with other banks and lenders on Letzbank’s portal where you can assess the competitive advantage in terms of interest, terms and conditions being offered by all these esteemed lenders!