Zerodha to launch ‘loan against securities’ product in August
Around 50,000 active customers of Zerodha have early access to the 'loan against securities' product.
August 20, 2020 / 09:05 AM IST
Discount broker Zerodha will launch a "loan against securities" product by the end of August, which will enable its customers to take loans against their portfolio investments in the market.
The company has been working on the product's launch for the past two years, according to a Mint report. Around 50,000 active customers of Zerodha have early access to the product.
"Last year, Securities and Exchange Board of India (SEBI) changed some rules around 'lending against security' and we had to rebuild our entire product. We launched our 'loan against securities' product in closed beta, a month back and the feature should go live in the next 4-5 weeks. We plan to steadily open this product to our larger customer base," said Nithin Kamath, founder and CEO, Zerodha, as quoted by the paper.
"If a consumer has investments worth Rs 1 lakh in the market, we can provide them loans against 60 percent of their portfolio," Kamath added.
Also read: Like A Boss | Zerodha's Nithin Kamath on the best place to prepare for leadership, the business leader he looks up to and more
Through the product, which is in the beta stage, Zerodha will provide loans to its customers an interest rate of 12-13 percent, the report said.
Zerodha, which currently has over three million clients, received a non-banking finance company license from the Reserve Bank of India in March 2018.
In June, Zerodha said it was planning a buyback of employee stock ownership plans (ESOPs) at Rs 60-65 crore, which would value the company at around $1 billion (Rs 7,000 crore).