Loan against mutual funds (India)

Wed, 13 May 2026 00:00:00 +0000

Loan against mutual funds, abbreviated LAMF, is a secured credit facility under which a bank or non-banking financial company extends an overdraft or term loan to a borrower against the pledge of mutual fund units owned by that borrower. The lender becomes the pledgee, the borrower remains the pledgor, and the pledged units stay in the name of the unit-holder. NAV appreciation, income distribution-cum-capital-withdrawal payouts, bonus units, and other corporate actions continue to accrue to the unit-holder, and mutual fund unit-holder rights over the pledged folio remain intact except for the right to redeem or switch the units under lien.

Pledge of mutual fund units

Tue, 12 May 2026 00:00:00 +0000

Pledging mutual fund units is the process by which an investor creates a security interest over a specified quantity of units in a mutual fund scheme in favour of a lender or broker, as collateral for a loan, an overdraft facility, or trading margin. The pledge does not involve a transfer of ownership: the investor retains beneficial ownership and continues to earn returns on the pledged units, but cannot redeem or switch those units while the pledge remains active.

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Loan against mutual funds (India)

Pledge of mutual fund units