Loan against shares may see more interest from banks

WITH THE RESERVE Bank of India (RBI) announcing an enhanced limit on loan against shares (LAS) to ₹1 crore, up from ₹20 lakh, banks are expected to become more aggressive in the segment, said bankers and analysts.

- CHRISTINA TITUS

Currently, non-banking financial companies (NBFCs) and brokerages are more open to lending to retail customers against their equity holdings.

The year-on-year growth in bank credit to individuals against shares and bonds was at a 19-month low in August, according to RBI data. Loans to shares and bonds grew merely 0.9% on-year to ₹9,807 crore in August compared to 26.8% in the year-ago period. However, experts believe that growth will pick up going ahead, followed by the RBI's announcements.