INTERVIEW QUESTIONS LOAN LOAN AGAINST SECURITIES DETAILS

Question: An NBFC I frequent is offering loans on mutual funds. I thought only banks were allowed to offer loan on securities. Can a NBFC offer loan against mutual fund?

Answer: While almost all banks offer loan against mutual funds, as per the guidelines of the Reserve Bank of India non banking financial companies of NBFC's with assets of more than Rs. 100 Crore can offer such a loan. Mutual fund loans are available for both equity and debt funds just like banks, the approved non banking financial companies also have a list of approved funds which they consider for loan.

While almost all banks offer loan against mutual funds, as per the guidelines of the Reserve Bank of India non banking financial companies of NBFC's with assets of more than Rs. 100 Crore can offer such a loan. Mutual fund loans are available for both equity and debt funds just like banks, the approved non banking financial companies also have a list of approved funds which they consider for loan. Source: CoolInterview.com

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