Mr. Nikhil Shah, D.G.M. - Loan Portfolio – NJ Group
Mr. Nikhil has over 24 years of corporate experience in diverse areas of product development, marketing and distribution . He also has prior experience in reviving sick units and was a visiting faculty to management institutes. Nikhil joined NJ three and half years back and is responsible for developing the loan business at NJ. Nikhil is a BE in Industrial Engineering and is an MBA in Marketing.
ES: What is LAS ?
Nikhil: LAS stands for Loan Against Securities Client can meet short to medium-term finance requirements without liquidating his investments. It helps clients for the long term wealth creation and stops booking profit or lose in an unplanned manner.
Client gets instant loan against his investments by pledging the securities.
ES: What are the salient features of Term loan LAS?
Nikhil: NJ has recently launched LAS term loan.
Client can get loan of Rs. 25,000 to 25 lakh. Available in 6, 12, 18, 24 & 36 months EMI (Equated Monthly Instalments). EMI includes principal plus interest. At the end of the tenure the loan is fully paid.
The Loan agreement and Pledge request form is E-signed. There are no physical documents required at the time of application. Client has to sign the pre-filled mandate and submit it at NJ branch. The fund is disbursed with in 48 hours after submission.
ES: Why LAS term loan gaining popularity?
Nikhil: The minimum loan available is Rs. 25000/-. Small investors can full fill his short term needs easily.
Term loans are preferred by Salaried employees and professionals who has regular income and needs money for the immediate requirements.
In term loans, the interest paid by client is much lesser as interest is charged on reducing balance.
e.g. if client is taking loan of Rs. 1 lac for the 24 months tenure.
He is paying EMI of Rs. 4707/-. The rate of interest is 12% but the end of the tenure he is paying only Rs. 12,968/- interest over the period of 2 years.
ES: Who are eligible to apply for NJ LAS ?
Nikhil: Currently all individuals who are residents of India, hold approved securities, are CKYC compliant and are not minors will be eligible to apply for NJ Capital's LAS Term Loan.
In the coming phase(s), the product may be extended to a broader category of clients, such as non-individuals (corporates, trusts, partnerships, LLPs, societies, etc.).
ES: How can one apply for a LAS from NJ Capital?
Nikhil: Find below the proces.
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Client can apply online for a loan through his/her E-wealth account.
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The loan application can be submitted from NJ E-wealth using “Apply For Loan” Module.
Path: NJ E-wealth Account >> Loans >> LAS Term Loan >> Apply for Loan
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The loan sanction is instant and the client will be directed to e-sign, i.e. online execution of Loan Agreement, Loan Term Sheet and Pledge Request Form for the pledged securities.
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Once the Agreement is executed, the client shall have to print, fill, sign and submit a physical copy of the bank mandate form to his/her Partner and/or nearest NJ Branch.
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Loan amount will be disbursed to the registered bank account (on e-wealth) within two (2) days of the submission of duly filled in Mandate Form to NJ Capital.
ES: Which securities shall be accepted as collateral against NJ Capital LAS term loan and what are the margins to be maintained for these securities?
Nikhil: At present, units of open-ended mutual funds – equity funds, debt funds, hybrid funds; equity shares of listed companies (BSE 500) and units of ELSS mutual funds after their lock-in period ends, are approved for availing NJ Capital LAS product.
|
Sr. No. |
Type of Securities |
Margin (in %) |
Loan eligibility on Rs.100/- of underlying Security Value |
|
1 |
Open-ended Equity Mutual Funds (incl. Units of ELSS funds after their initial lock-in period ends) |
55% of NAV |
Rs.45/- |
|
2 |
Debt Mutual Funds |
10% of NAV |
Rs.90/- |
|
3 |
Balanced / Hybrid Funds |
55% of NAV |
Rs.45/- |
|
4 |
Fund of Funds |
55% of NAV |
Rs.45/- |
|
5 |
Listed Equity Shares* |
55%-60% of Last traded price |
Rs.45/- to Rs.40/-. |
ES: Shall corporate bonds, perpetual bonds and units of close-ended mutual funds be accepted as collateral against NJ Capital LAS term loan?
Nikhil: At present, the LAS product is NOT being offered against corporate bonds, perpetual bonds and units of close-ended mutual funds.
ES: What are the future developments in LAS Term Loan?
Nikhil: E-mandate will be launched soon. Client can e-sign the mandate. We wish to disburse fund within 24 hours if mandate is e-signed.
ES: From where i can get the presentation and FAQs on LAS term Loan?
Nikhil: Everything related to NJ LAS Term Loan is available on Partner desk and NJ Assist. Also you can download from these links: FAQ, Presentation.