For which assets can Finsire enable lien marking solutions?
Finsire offers lien marking solutions that allow lenders to legally claim certain assets as collateral until the borrower fulfils an obligation, typically a loan. This ensures that if a borrower cannot repay the loan, the lender has the right to seize the collateral to recover the owed amount.
Currently, Finsire’s solutions facilitate lien marking on a variety of assets, which include but may not be limited to:
- Mutual Funds: APIs can place a lien on a borrower's mutual fund units for the Loan against Mutual Funds. While the units remain in the investor's name, they cannot be sold or redeemed until the lien is removed after the loan is repaid.
- Demat holdings: Shares, bonds, and other securities held in a demat (dematerialized) account can also have a
lien placed against them during the Loan against Securities process. This is particularly common when
securities are used to obtain margin loans for trading or as collateral for other types of credit.
The lien marking process through Finsire would typically involve several steps, including the valuation of the assets, the agreement between the lender and borrower on the loan amount and the assets to be marked, the actual marking of the lien by a legal or regulatory process, and the release of the lien once the loan is fully repaid.
For lien marking to be effective, Finsire ensures proper integration with the relevant financial institutions and regulatory bodies. For example, with mutual funds, this involves coordination with the respective mutual fund's Asset Management Company (AMC) and its Registrar and Transfer Agent (RTA). For demat holdings, this would require integration with the depository participants and possibly stock exchanges. Vehicle Loans require integration with regional transport offices (RTOs) for the hypothecation process.
Loan Against Mutual Funds
Loan Against Securities
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