Geojit kicks off online share pledging

Subsidiary to offer loan against shares digitally

Mumbai, Jan. 5: Geojit Credits, the NBFC arm of leading brokerage firm Geojit Financial Services, on Wednesday launched a digital platform to offer loans against shares (LAS), thereby becoming the first company to offer LAS digitally to any demat account holder registered with the National Securities Depository Ltd (NSDL).

Launching the service in Kochi, NSDL managing director Padmaja Chund-uru said this digital LAS facility is designed to provide instant liquidity to investors to help them fund further investments or to meet immediate personal expenses.

Using the LAS digital facility, any NSDL demat account-holder can submit a pledge request to his/ her DP in less than a minute, she added.

Geojit Group founder and managing director C. J. George said the LAS digital platform will enable clients to apply for loans by pledging shares by selecting a scheme of their choice and completing all documentation online.

Once the loan application is digitally signed and approved, the amount will be instantly credited to the bank account of the client and interest will be charged only for the amount utilised, he said.

Investors applying for a loan by pledging their shares on the LAS digital platform need to have free holdings of eligible shares in their demat accounts. They are also required to have satisfactory Cibil scores. Those who have demat account with NSDL, irrespective of who their brokers are, can avail of

LAS through Geojit Credits' online platform, he said.

The LAS market is estimated to be around Rs 55,300 crore as of October 2021 and is growing at 23-25 per cent per annum, George said, but noted that cumbersome paperwork often delays the LAS scheme with clients failing to get loans on time.

However, with the launch of the LAS digital platform, Geojit will make the entire LAS cycle —from processing to disbursal—a fully digital experience and shrink the lead time to a few minutes from a number of days now, he said.

"We are the first company capable of disbursing LAS digitally to any demat account holder registered with the NSDL,” George said.

He added that the platform is developed by NSDL and Geojit Technologies, the technology division of Geojit Group, which has been in offering brokerage services for the past 35 years.