You can pledge marketable lots of fully paid shares of blue chip companies. These shares should be highly liquid and traded regularly on the stock exchange. In the case of Sebi-mandated compulsory demat companies, the shares need to be dematerialized before being pledged with the bank.You are urgently in need of funds to tide over a contingency, but your money is locked in select equities. With depressed stock market conditions, you are not too keen to dispose them off, as you think they hold considerable upside potential. What do you do in such a situation? Resort to panic sales of shares? Seek financial assistance from friends and relatives? Would it not be better if there existed the option of you pledging your shares with a bank, and getting a loan based on the value of the equities?
This is precisely the service that most banks are offering nowadays. The scheme of providing loans against shares by Canara Bank is given below
Loan against shares from Canara Bank
* Earn on your investments. And keep them too.
* No need to liquidate your investments even during dire necessities.
* Instead, you can avail CanCASH loan pledging your investments in Shares, Debentures, Bonds or Units.
* Individuals – Existing customers with satisfactory dealings.
* New customers – well-introduced and credit worthy can also avail.
How much will you get :
* Shares and Debentures – upto 50 % of market value
* PSU Bonds upto 70% of Market Value
* Units of UTI and CBMF – 50% of NAV or market value whichever is less.
Avail upto Rs.5 lakhs
Maximum loans upto Rs.20 lacs if demat account is maintained
With DPs of our bank.
Securites can be replaced / substituted during the currency of the loan upto 10 times.
* Upto 60 months. EMI also acceptable.
* Selectively OD limit is also considered.
* 0.1% of the loan amount subject to a minimum of Rs.100/- and maximum of Rs.250/-.
Documents / Formalities :
* Stipulated Loan Application with 2 passport sized photographs
* Guarantee / co-obligation where applicable
* Statement of holding of scrips issued by DP
* Latest salary certificate / income proof like ITAO / IT Return
* Financial Statements for the last 2 years (in case of non-salaried individuals)
Sources : http://www.canarabank.com/