Mirae Asset Financial Services adds tax saver schemes sans lock-in in its lending portfolio
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Expanding the ambit of mutual fund units as a collateral for retail investors, Mirae Asset Financial Services – the non-banking finance company has added eligible tax saver schemes free from lock-in period from all the asset management companies in its list of approved mutual fund schemes to offer overdraft facilities by pledging these units.
These Tax Saver Schemes, which are preferred by retail investors due to exemptions enjoyed under section 80C, come with a three-year lock-in period. Hence the lender did not have any recourse to redeem during the lock-in period if the borrower failed to repay the dues. Hence, this acted as a deterrent to accept such units as a collateral for lending. Based on the demand from both clients as well as distribution partners, The NBFC has now enabled lien marking of lock-in free units of Tax Saver Schemes for availing loans.
Expressing his heartfelt gratitude to both RTAs for facilitating the seamless digital lien marking of lock-in free units in Tax Saver Funds, Mr Krishna Kanhaiya, CEO, Mirae Asset Financial Services (India) said, “This significant change allows us to further broaden our already extensive list of approved mutual funds. The Tax Saver Funds (ELSS) category is predominantly popular amongst retail investors as they not only save tax by investing in these funds but also create wealth for them. Among the 35 schemes that have reached the three-year mark, an impressive 23 have nearly doubled investors' wealth in the past three years.”
As on September 2023, overall ELSS AUM is of Rs 1.84 lakh crore, out of which retail investors contribute the highest, around 85 percent of Rs 1.57 lakh crore. In terms of equity, growth and balanced schemes, retail investors' contribution is around Rs 10 lakh crore and tax saver mutual fund AUM constitutes around 16 per cent, as per AMFI data.
“We have already witnessed existing clients, as well as new clients, start availing loans against lock-in free units of tax saver funds. With the addition of ELSS schemes in the approved list of mutual funds, we remain committed to our mission of delivering financial solutions to our clients with speed, efficiency, and complete transparency," Mr Kanhaiya said.
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