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By:

Rajendra Joshi

3 December 2024 at 3:50:26 am

Kolhapur cop sets new standard for investigations

Yogesh Kumar Gupta Kolhapur: When a police officer takes genuine interest in securing justice for citizens duped in financial fraud, investigations can move swiftly enough to lift the crushing burden off affected families. Kolhapur Superintendent of Police Yogesh Kumar Gupta has demonstrated precisely that. His firm and sensitive handling of a cheating case ensured relief for Akshay Deepak Dhale, a young entrepreneur from Kolhapur who had fallen prey to a Rajkot-based company that allegedly...

Kolhapur cop sets new standard for investigations

Yogesh Kumar Gupta Kolhapur: When a police officer takes genuine interest in securing justice for citizens duped in financial fraud, investigations can move swiftly enough to lift the crushing burden off affected families. Kolhapur Superintendent of Police Yogesh Kumar Gupta has demonstrated precisely that. His firm and sensitive handling of a cheating case ensured relief for Akshay Deepak Dhale, a young entrepreneur from Kolhapur who had fallen prey to a Rajkot-based company that allegedly promised to secure large government loans for business expansion. Gupta’s intervention compelled company representatives to travel to Kolhapur and assure repayment of the money collected, effectively forcing them onto the back foot. Dhale, a resident of Sadar Bazaar, had dreamt of expanding his late father’s small printing business after losing him during the Covid-19 pandemic. Lured by promises of securing a multi-crore loan under a Central government scheme, he transferred ₹69 lakh — raised from nearly 15 friends and relatives — to the company’s account. The loan, however, never materialised. When Dhale began making inquiries, he was met with evasive responses. The financial shock left the family devastated. Initial attempts to seek police help reportedly went nowhere, with the matter labelled as “non-criminal” and dismissed at the preliminary stage. Acting on advice, the family approached the district police chief directly. Gupta’s decisive stand altered the course of the case, leading to concrete assurances of refund from the company. However, a far larger challenge now looms before the Kolhapur police chief. Across Kolhapur — and reportedly other parts of Maharashtra — several Marathi youths claim to have been duped by a Morbi-based businessman who allegedly promises to set up “innovative” enterprises for aspiring entrepreneurs. The scale of the alleged fraud runs into crores of rupees. The businessman, said to be linked to a major tile industry in Morbi, is accused of luring youngsters through social media promotions and advertorials in prominent English dailies. Contracts are structured to appear transparent and legitimate. Prospective entrepreneurs are promised exclusive access to novel business models, often involving products sourced from Chinese markets, complete with projected marketing strategies and attractive feature lists. According to victims, payments are collected upfront, but the products eventually supplied lack the promised specifications and hold negligible market value. Several youths across Maharashtra are believed to have suffered losses. Those who have confronted the accused allege they were threatened with defamation suits and warned that a team of “expert lawyers” would ensure their financial and reputational ruin if complaints were filed. While some victims have resigned themselves to debt and despair, others who attempted to pursue police complaints claim they were turned away. For many of these young entrepreneurs, SP Yogesh Kumar Gupta represents a ray of hope. If he chooses to take up the matter with the same resolve demonstrated earlier, it could not only restore faith among affected youths but also send a strong deterrent message to fraudsters operating under the guise of innovation-driven enterprise.

Loans against mutual fund are not ideal for long term expenses: Krishna Kanhaiya

Updated: Oct 21, 2024


Loans against mutual fund are not ideal for long term expenses: Krishna Kanhaiya

As mutual fund units are emerging as the new collateral for pledging beyond conventional gold and real estate, The Perfect Voice spoke with Krishna Kanhaiya, Director and CEO, Mirae Asset Financial Services – a NBFC that lends against mutual fund units and securities to gather more insights on the subject. Excerpts…


It has been over two years since you launched loan against mutual funds. How has been the journey of your loan book so far in terms of the type of retail investors?

Launched in July 2022, our loan book has doubled from December 2023 till date after having surged from January to December 2023. With our digital first approach, we have seen borrowers in the age group of 30-50 years for their needs including marriage, home renovations, children’s education, and travel.


What is the market size of loan against mutual funds in India and how seamlessly can an individual complete the process?

Unfortunately, there isn’t a published report that specifically outlines the market size for loans against mutual funds. This type of loan is typically categorized under the broader umbrella of loans against securities, which also includes loans against shares, insurance policies, gold, property, and other assets.

However, we believe that the potential market size for loans against mutual funds is significant. This belief is rooted in the current scale of individual investors’ Assets Under Management (AUM), which, as of July 2024, stands at an impressive Rs 39.50 lakh crore.


Compare to gold loan or loan against property, how convenient and cost effective it is, in terms of interest rate, to borrow against MF units

Some of the challenges with a loan against properties include valuation of the property, depending on the condition of the property and the time-consuming and tedious process along with high processing fees and other charges. Moreover, the borrower has to submit income documents to prove his or her repayment capability, even if it is a secured loan and interest rate may differ on credit score of the borrower, age, type of property and repayment capability among others.

In case of availing gold loans, interest rate is higher compared to loan against mutual funds and the process is physical as the borrower has to visit the branch or the relationship manager has to collect gold from the applicant’s place. Valuation of gold is based on gold purity and yellow metal below 18K is not accepted and the entire value of ornament is not considered.


What are the risks including margin call that an individual should bear in mind while borrowing against MF units? Any of your experience of default so far.

If the market falls, your eligible loan limit is revised as per the current market value of the pledged mutual funds on a daily basis. Where the borrower’s utilized amount is higher than his or her revised eligible limit, you receive a margin call to regularize your loan account within the stipulated timeline either by depositing additional funds or by pledging additional mutual fund units as collateral.

We recommend our clients to not utilise 100% of the loan limit and to maintain a buffer to avoid such margin calls. Pledged mutual funds may be invoked if the borrower fails to regularize the account or repay your over-dues within the stipulated time period. Till the units are pledged, redemption will not be possible. Loans against mutual fund are not ideal for long term expenses and against short term investments and they should not be used for speculative purposes in the capital market.


Are all mutual fund units eligible to be pledged for borrowing or are there any restrictions?

Not all mutual fund units are eligible for pledging to borrow against them. Close-ended mutual fund schemes are not eligible for pledging as they cannot be invoked in case of default. Hence, only open-ended schemes can be pledged to avail loan against mutual funds. Tax saving schemes (ELSS) outside of the lock-in period can be pledged to avail the overdraft facility.


Is the borrower entitled to receive benefits like dividend and other benefits if any, from the pledged units during the period?

Yes, the borrower is entitled to receive benefits such as dividends and other related benefits from the pledged units during the period of the loan. When a borrower pledges their mutual fund units as collateral for a loan, they retain full ownership of those units. This means that, even though the units are pledged, the borrower continues to be the legal owner and thus is entitled to all the benefits that come with ownership.

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