Get a debit card by pledging your securities/MF
The secret of making wealth is not saving money, but making more money. With such unpredictable times and fluctuations in the global economy, every country is anxious to boost its GDP and ready to take steps in its favour. In a significant move towards making India 'Atma Nirbhar', the Reserve Bank Of India gives a green signal to banks for providing digital debit cards to personnel using overdraft facilities. These debit cards will be a game-changer in providing easy and upgraded payment experience against all your assets when the market is about to restart since the pandemic. Read the complete article to get all the updated news and information on getting a debit card by pledging the securities.
What is Loan Against Securities(LAS)?
The Loan Against Securities is an overdraft facility provided to ensure better lending of funds and also pledging equivalent collateral in case of any mishappening. The only twist in availing a personal loan and loan against securities is that the security is your assets in the latter. The Securities in an overdraft facility include demat shares, savings bonds, and mutual fund units, etc. The main benefit of choosing loans against securities is that they are available at fewer interest rates than unsecured loans like personal loans.
The New Facility
As per the latest guidelines by the Reserve Bank Of India on loan against securities, ICICI bank has initiated providing debit card facility to those who are availing a loan against securities. The card is available on the Visa platform providing payment options on all merchant establishments like e-commerce and POS transactions. The sanctioned amount of the loan against securities is the limit to which funds can be overdraft and has a lesser interest rate than unsecured loans. The main highlight of this digital card is that the value of the sanctioned amount automatically updates as the value of the asset (security) is updated.
How to Avail the Facility
The latest directives from RBI include the issuance of new debit cards to all the new customers availing the loan against securities. The card will get automatically renewed on renewing the LAS account. The card will be functional across all the online payment platforms. The existing customers of the loan against securities will get a debit card too. Now that we have seen how to avail the benefits, let's look at the eligibility to avail the benefits:
The applicant must be 21 to 75 years of age with a valid email ID and mobile number.
Demat Shares:
Only Individuals can apply. [Hindu Undivided Families (HUFs), Companies, Partnerships, Sole Proprietors-are specifically excluded]
Loans are granted only against the list of approved scripts, as determined by ICICI Bank.
For Equity oriented funds – Only Individuals can apply. [Hindu Undivided Families (HUFs), Companies, Partnerships, Sole Proprietors are specifically excluded.]
For Debt Funds/FMP/ETF – Individuals, Hindu Undivided Families (HUFs), Companies, Partnerships, and Sole Proprietors can apply.
Loans are granted only against the list of approved Mutual Funds/ schemes, as determined by ICICI Bank.
Features of the new facility
Get a debit card worth the amount equivalent to your assets.
Pay lower interest rates.
Get a digital debit card issued in one business day that is functional across any payment platform.
Get a physical card issued in seven business days.
Enjoy uninterrupted and hassle-free services with auto-renewal.
Mobile banking and internet banking facilities.
Benefits of pledging securities for loan
The debit card authorises payment of INR 3L each on POS and online transactions daily.
The digital card is generated in one business day on the app and can be used readily for online purchases.
The debit card will automatically renew on renewing the account.
Impact on the Economy
The latest measures being taken by the RBI in boosting the Indian economy enlists many reforms that are successfully functioning. The issuance of debit cards on loan against securities aims at simplifying the process of evaluation of assets and getting a loan worth the amount. The debit cards will help many MSMEs, businesses, and personnel with assets to leverage their value. The flow of funds across various sectors will revive the dying businesses, and also the assets will get the proper value. With small steps at a time, cashflow will regain its natural momentum, and the asset will increase in its value. With this, the LAS card will also get updated with the latest value of the asset.
Conclusion
The best countermeasures for a pandemic are also failing to revive the dying global market, and the economies have been devising new methods to counter barriers. The latest policies and reforms include methods that give easy access to funds and also ways to resurface assets that can be valued to get better results. You can now get a valuable debit card against your loan as securities or mutual funds which makes everyday life comfortable and secure. The loan against securities aims to provide the best value of the assets at a lesser rate of interest. The policy of issuing debit cards on the overdraft amount will surely attract buyers and sellers to use their asset's value to sustain and grow their businesses. ICICI Bank is the first to launch the facility, and it aims at easy accessibility to sanctioned amounts and a greater generation of value.
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