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Canara Bank to Provide Loan Against Mutual Funds From April 1

Written by: Team Angel OneUpdated on: Jan 28, 2025, 2:44 PM IST
Canara Bank is set to introduce a fully digital loan service against mutual funds starting 1st April 2025.
Canara Bank to Provide Loan Against Mutual Funds From April 1
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In a significant move towards digital banking, Canara Bank has announced the launch of its fully digital loan service against mutual funds, effective from 1st April 2025. This service allows customers to leverage their mutual fund investments to obtain loans without the need to liquidate their assets, offering a convenient and efficient solution for immediate financial requirements.

Features of the Digital Loan Service

The upcoming digital loan service is designed to provide customers with instant access to funds by pledging their mutual fund units as collateral. Key features of this service include:

  • Loan Quantum: Customers can avail loans up to ₹20 lakh, depending on the valuation of their mutual fund holdings.
  • Loan-to-Value Ratio: The bank offers a loan amounting to up to 50% of the Net Asset Value (NAV) of the pledged mutual fund units.
  • Interest Rates: Competitive interest rates are applied, with options for both floating and fixed rates.
  • Repayment Tenure: Flexible repayment options are available, with a tenure of up to 60 months.
  • Processing Fees: A nominal processing fee of 0.1% of the loan amount is charged, subject to a minimum of ₹100 and a maximum of ₹250.

Benefits to Customers

This digital loan service offers several advantages to customers:

  • Retention of Investments: Customers can meet their financial needs without selling their mutual fund units, allowing their investments to continue growing.
  • Convenience: The entire loan application and disbursement process is conducted online, eliminating the need for physical branch visits.
  • Quick Disbursement: The digital platform ensures rapid processing and disbursement of loans, providing timely financial assistance.
  • No Prepayment Penalty: Customers have the flexibility to repay the loan ahead of schedule without incurring any prepayment charges.

Canara Bank Share Performance

As of January 28, 2025, 2:12 PM, the shares of Canara Bank are trading at ₹92.35 per share with a surge of 0.46% from its previous day’s closing price. Over the last month, the stock has declined by 7.11%.

Conclusion

Canara Bank’s fully digital loan against mutual funds marks a significant advancement in the bank’s digital offerings, aligning with the evolving preferences of customers for seamless and efficient banking solutions. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 28, 2025, 2:44 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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