HDFC recently launched its’ ”Digital Loans against Mutual Funds (LAMF)” in partnership with transfer agent CAMS, where customers can now pledge mutual fund assets online and get an overdraft limit set in their account in under 3 minutes – by availing of this product through the HDFC Bank website in three easy steps, Arvind Kapil, Group Head – Unsecured Loans, Home, and Mortgage Loans, HDFC Bank.
Describing this initiative as a “First in Industry, India and World,” Kapil said this would prove to be a game-changer for the industry with the TATs crunched from two to three days – down to barely two to three minutes. “Customers can unlock the value of their investments without liquidating them and the transactions are extremely seamless with the loan amounts being upto Rs one lakh (minimum) and Rs 10 lakhs (maximum),” he said adding that the HDFC is in touch with 10 Mutual Funds houses that are registered with the CAMS, and together constitute about 60% of the total assets under management of the industry.”
“With Digital LAMF, customers can design their own loan against their Mutual Fund, choosing which assets from their portfolio they would like to pledge, calculate their overdraft limit eligibility against the mutual fund, open a current account online instantly and get the money into the account in a few minutes,” he said, adding “In emergencies, customers will not be forced to liquidate assets at less than optimal market conditions, but can design their own loan to tide over the cash crunch. With this product, we hope to reach out to customers in the Tier II and III markets and bring them into the digital lending fold.”
He said Phase I would focus on “Singly-held” Mutual Funds, while Phase II would have “Jointly-held” Mutual Funds. “The Mutual Funds industry is growing on a massive scale and our focus is on ‘granular’ loans which we see as a sustainable trend. It’s a serious game-changer as it can be even done on a mobile phone. One needs to have a Current Account to obtain this loan. These products will be seen on the insurance side as well,” he said in reply to media questions.
