(FAQ) LOAN AGAINST SHARES/DEBENTURES
Q. What shares can I place as security?
A. 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.
Q. How long does it take for SBI to sanction my loan?
A. The actual time taken to sanction and process the loan depends on the time taken to establish the creditworthiness of the borrower.
Q. What is the maximum tenor of the loan?
A. 3 years.
Q. How is the repayment schedule decided?
A. This depends on whether the loan has been structured as a demand loan or an overdraft facility. In the case of the former, there is a fixed repayment programme. With an overdraft arrangement, the drawing power is reduced over the tenor of the loan.
Q. Can the loan be availed from all SBI branches?
A. The loan can be availed from specified branches of SBI.
Q. Can I prepay the loan?
A. You may prepay the loan, either partly or in full, at any stage, with no prepayment penalty .
Q. How does an SBI Loan against shares compare against those offered by other institutions?
A. The rates of interest offered by SBI are one of the lowest in the industry. Other norms regarding loans against shares and debentures have been stipulated by the Reserve Bank of India.