Bombay, Maharashtra, India:
As part of the launch of the facility, Abonty Banerjee, Chief Digital Officer of Tata Capital, said the digital LAS offered by NBFC will help its customers meet their financial needs easily. She further said that Tata Capital is confident that its new credit facility will benefit its customers.
Tata Capital has introduced the facility through its digital customer service portal, which can be used to place pledge requests digitally using the NSDL API and gain the same approval from the respective depositary (DP) participants. The availability of this online facility should make the process of obtaining credit against equity very convenient and quick.
How does the “loan for equity” facility work?
Loan Against Shares is a facility where people can take loans against shares in their Demat account as collateral. The maximum amount that an individual can avail is determined by a percentage of the total market value of the shares present in the individual’s portfolio.
In India, banks can lend a maximum of Rs. 20 Lakh under a single entity under the LAS facility. However, being a Non-Banking Finance Company (NBFC), Tata Capital can offer up to Rs. 5 Crore credit under the LAS facility. Tata Capital is one of the first NBFCs to offer an end-to-end integrated digital onboarding experience for equity-based loans.
Who is eligible for Tata Capital LAS facility?
The eligibility criteria to benefit from the Tata Capital Loan Against Shares facility are as follows –
2. Non-Individuals: Entities that have been in existence for at least two years are eligible for the credit facility.
Required Documents for Equity Loan Facility:
To benefit from this facility, the following documents must be submitted:
- Photo ID proof such as Aadhaar card, PAN card etc.
- Proof of address such as passport, utility bill, bank book, etc.
- Bank statement for the last six months
- Tax return for the last two years
- Salary slips for the last three months
- 1 security check
- A passport size photo
What are the key benefits of Tata Capital’s LAS facility?
One can enjoy the following benefits by availing LAS facility with Tata Capital –
- Online process: The process from applying, creating the account, pledging shares and verifying identity to transacting the amount can be done online. No paperwork and no branch visits required. You can also sign your documents electronically and benefit from the e-Nach function.
- Retention of title: When one pledges his shares for a loan from Tata Capital, he continues to retain ownership of his shares. They can continue to benefit from the returns generated by their investment in the stock market, because they do not need to liquidate them.
- Null scope of the error: With Tata Capital’s online customer service and onboarding platform, there is zero risk of document errors, whether those submitted to the NBFC or those exchanged with the DPs. Thus, it helps to avoid the risk of rejection of their application and delays in processing the loan amount.
- Interest payable on loan amount used only: When using the LAS facility with Tata Capital, one only has to pay the interest on the amount used as a loan by them and not the total credit extended by the NBFC. The remaining line of credit can be used as an overdraft facility.
- Loan processing in 1 day: Once the documents submitted by the individual are verified, the shares are pledged and the final approval is given, then it only takes one day for the individual to receive the full amount of the loan.
- No Foreclosure or Prepayment Penalty: One can repay the loan amount whenever they want, even if it is only 1 or 2 days after disbursing the loan from Tata Capital. NBFC does not charge any foreclosure or prepayment penalties.
With the LAS installation offered by Tata Capital, one can leverage their investment to meet their credit needs while enjoying the returns of their investment. All one has to do is pledge their shares digitally, and they can get a loan of up to Rs. 5,000,000,000!