Disclosures & terms

Support, complaints and grievance redressal

For support, complaints or grievance assistance, contact Federal Bank customer care:

Eligibility and approval

• Applicants must be Resident Indian individuals aged between 18 and 70 years, and must own the mutual fund units offered as security in their own name.
• Only schemes on Federal Bank's approved list are eligible. ELSS and schemes outside the approved list are excluded.
• The facility is secured by a pledge or lien over eligible mutual fund units owned by the borrower.
• Sanction is subject to KYC, credit assessment, verification, documentation and the Bank's approval.
• Any indicative eligibility displayed before completion of assessment is not a loan sanction or a commitment by the Bank.

Valuation, limits and drawing power

• The eligible amount is based on the prevailing value of approved mutual fund units and the applicable loan-to-value.
• Loan-to-value is up to 50% of NAV for eligible Equity and Hybrid schemes, and up to 75% of NAV for eligible Debt schemes.
• The minimum facility amount is ₹1 lakh and the maximum is ₹1 crore, subject to the type and value of eligible mutual funds, regulatory limits and the Bank's credit policy.
• The sanctioned limit and drawing power may be reduced if the value or eligibility of the pledged units changes.
• Amounts may be repaid and redrawn within the available overdraft limit, subject to applicable conditions.

Interest and applicable terms

• Interest is charged on the utilised outstanding amount at the applicable rate and is serviced monthly.
• Rates start from 9.50% per annum. This starting rate is indicative and is not guaranteed for every applicant.
• The final applicable rate, APR, charges and repayment obligations will be disclosed in the Key Fact Statement and sanction communication.
• Interest rates, fees, charges, margins and loan-to-value are subject to revision in accordance with the facility agreement, regulatory requirements and the Bank's policy.

Fees, tenure and renewal

• Processing fee: 0.50% of the sanctioned limit, with a minimum of ₹1,500 and a maximum of ₹7,500, plus applicable taxes.
• Renewal charge: ₹1,000 plus applicable taxes.
• The facility tenure is 12 months. Renewal is not automatic and remains subject to satisfactory account conduct, adequate collateral, continued eligibility and the Bank's approval.
• Prepayment and closure charges: nil.
• Stamp duty, statutory charges, pledge-related charges and applicable taxes are payable in addition to the disclosed fees.

Collateral and market risk

• Mutual fund units may be liquidated if margin requirements are not restored or if another event of default occurs.
• Partial unpledge or release will be permitted only if the remaining security is sufficient.
• Mutual fund investments are subject to market risks. Returns are not assured and the value of pledged units may fall.

Permitted use and customer review

• Proceeds must not be used for purposes prohibited by law, applicable regulation or the Bank's policy.
• The customer must review the sanction terms, Key Fact Statement and facility agreement before accepting the facility.