Lien/Pledge

Can I pledge my Mutual Fund units of Zerodha Mutual Fund?

Yes. You can pledge your free units held under any schemes of Zerodha Mutual Fund (except the units under any ELSS / Tax saver schemes due to the applicable lock-in period for such schemes( subject to the applicability and hair-cut provided by the Financial Institutions)

How can I create a pledge on my investments with Zerodha Mutual Fund?

Investors can submit a request to the Mutual Fund/Registrar (CAMS) with details of the investments that the investor wishes to pledge in the name of the respective Financial Institution with a verification letter from the lender confirming all the details for the loan. Financial Institutions can also send a request directly with the investor’s details and consent.

Kindly note that the consent should be from all the holders of the investments (as per the Joint Holding pattern in the folio). In the case of investors other than individuals, a copy of the latest partnership deed/board resolution should also be submitted clearly highlighting the authorised signatories confirming the lien marking in the name of the financial institution(s).

On successful validation of the details, a lien will be marked on your investments in the name of the Financial Institution. This will restrict any redemption or switch-out transactions in the folio unless the loan is repaid and confirmed by the Financial Institution(s).

Does Zerodha charge any processing fees for the lien/pledge of units?

As a Mutual Fund, Zerodha does not charge any processing fees. Financial Institutions may charge fees based on their business relationship with the investors.

What is the turnaround time for lien marking and un-marking of my investments?

The process of Lien marking on the Mutual Fund investments can take up to 2-3 business days subject to receipt of all documents in proper order from the investors and/or Financial Institution(s).

What are the mandatory documents and details required for lien marking/pledging the Mutual Fund investments?

• Investor Name
• Folio number
• Scheme Name
• Amount / Units to be pledged
• Authority letter issued by investor / Lien request form / details 
• Consent letter of the investor / Partnership deed / Board Resolution as per the holding and investor status
• Name and confirmation of the Financial Institution
• Covering Letter from Financial Institution, along with the Lien Request Letter from Investor On Bank’s Letter Head or with Seal