Loan Against Securities: Raise Funds on Your Shares and Bonds

A loan against securities (LAS) lets you pledge listed shares, bonds, REIT/InvIT units and similar holdings from your demat account to borrow money, while you keep ownership and any dividends or interest.

What changed recently

In its 1 October 2025 policy, RBI raised the limit for bank loans against shares from ₹20 lakh to ₹1 crore per individual. It also raised IPO financing from ₹10 lakh to ₹25 lakh per person and removed the regulatory ceiling on lending against listed debt securities. These were the first revisions since 1998, and they widen access for investors with larger portfolios. NBFC limits follow their own policies.

How the pledge works

1. You choose a lender and check which of your securities are on its approved list.
2. You authorise the pledge through your depository participant (NSDL/CDSL) using an OTP.
3. The lender sanctions a limit, usually as an overdraft, based on the value of the pledged securities after the margin is applied.
4. When you repay, the pledge is released and the securities are freely tradable again.

How much you can borrow

• Equity shares: typically up to about 50% of market value, often lower for mid-cap and small-cap stocks
• Bonds and debt securities: usually higher, depending on credit rating and liquidity

The usable limit moves daily with market prices.

Advantages

Risks

• Margin shortfall: a sharp market fall can reduce the value of your collateral. The lender may then sell pledged shares, often at the worst time.
• Concentration: pledging one or two stocks raises the risk of a margin call. A diversified pledge is safer.
• Use of funds: borrowing against shares to buy more shares adds leverage and magnifies losses.

Good practice

• Draw well below your sanctioned limit, to leave a buffer.
• Track your margin regularly, and keep cash or extra securities ready.
• Use LAS for defined, short-to-medium-term needs with a clear repayment plan.

SERNET can help you compare lenders and arrange a loan against your listed securities. Sanction, margins and pricing are set by the lender.