SBI loan against shares: When you want money for unforeseen expenditure, here is how to get it

SBI loan against shares: If you want to leverage your investments in shares for loans to meet unforeseen expenses doing it with the State Bank Of India (SBI) can be a viable alternative. You can avail loans up to Rs 20 lakh against your shares.

The loans can be availed for meeting any contingencies, personal needs or even for subscribing to rights or new issues of shares.

SBI offers this facility to its individual customers who enjoy "a past satisfactory relationship" with SBI, maintaining their DEMAT account with SBI Cap Sec. The loan is offered as an overdraft or demand loan. The loan can only be availed in a single name.

SBI has currently put NRIs out of the purview of the loan facility.

The loan facility has been designed specifically to help people avail loans at the time of contingencies. The loan will be permitted for subscribing to rights or new issue of shares against the security of existing shares.

Though, there is a small caveat. The bank will not entertain loan requests for speculative purposes, inter-corporate investments or for acquiring a controlling interest in company/companies, the SBI website says.

The minimum loan amount has been kept at Rs 50000. Loans against shares not to exceed Rs 10 lakh if the purpose is for subscribing to IPOs, the website says.

Repayment Schedule
Demand Loan: To be liquidated in a maximum period of 30 months.
Overdraft: Running Overdraft (Auto-Renewal every year )

Margin
You will need to provide a margin amount of 50% of the prevailing market prices of the shares being offered as security.

Security
Pledge of the Demat shares against which loan is sanctioned

Processing Fees
0.75% of the loan amount with a minimum of Rs 1000 + GST

See Zee Business Live TV Streaming Below

Review Charges
Rs.1000 + Applicable GST (Applicable only for Overdraft A/C)

Account Keeping Charges: Rs 550 + GST
Account Keeping Charges are applicable for Overdraft Facility