Private sector lender, ICICI Bank has introduced an open-end credit facility for patrons availing themselves of Loan Against Securities (LAS). They have launched a debit card for those who avail the LAS.
The card is out there on the Visa platform. It may be used across all domestic merchant establishments to form POS and online transactions like payments on e-commerce portals, among others, using the sanctioned LAS amount.
ICICI Bank has brought the debit card facility to assist borrowers during the pandemic.
“The open-end credit are going to be issued to new customers who can avail themselves of LAS and can be automatically renewed upon renewal of the LAS account. Customers get a digital open-end credit within one business day of availing LAS and can get the physical card within seven business days.
Existing customers of LAS also will get this card shortly,” ICICI Bank said during a statement on Tuesday. The debit card offers a daily transaction limit of a maximum of ₹3 lakh each for POS and online transactions.
How to use?
According to the Bank’s handout, here’s the way to avail the facility:
• The debit cards are going to be issued to new customers who avail LAS and can be renewed upon renewal of the LAS (Loan Against security) account.
• Customers get a digital open-end credit within one business day of availing LAS, which may be accessed on the Bank’s mobile application iMobile.
• Using the digital debit card, they can start making transactions through online platform post, enabling the functionality. They also get the physical card within seven business days, if needed.
• Existing customers of LAS also will get this card shortly.
What are the benefits of the open-end credit facility?
• Transaction limit: the cardboard offers a maximum daily transaction limit of Rs. 3 lakh each for PoS (Point of Sales) and online transactions.
• Digital card: The Bank provides a digital card to customers, which is formed available on iMobile app within one business day.
• Automatic renewal: the cardboard is automatically renewed upon renewal of the LAS account
What is Loan Against Securities (LAS)?
The customer can pledge your securities in favour of ICICI Bank, get an overdraft facility of up to a particular value. The interest rate is going to be charged only on the quantity withdrawn an and for the period utilised. LAS is out there on dematerialised shares, open-end fund units, fixed maturity plans, ETFs, insurance policies and savings bonds.
Back in April of 2020, the Federal Reserve Bank of India (RBI) allowed banks to issue electronic cards to holders of overdraft accounts. The power is often extended to Overdraft account holders within the nature of a private loan, and can’t carry any specific end-use restrictions, RBI had said.
TR Ramachandran, Group Country Manager, Visa, India & South Asia, said that the RBI’s directive allowing digital credentials for Overdraft Accounts has come at the right time as businesses plan to recover from the pandemic. This product allows cardholders the ease to use their other check overdraft credit limit with ICICI for everyday purchases, across eCommerce and face to face merchants, seamlessly.
Sudipta Roy, Head – Unsecured Assets, ICICI Bank said that this new debit card facility aims to supply better accessibility to the customers to their sanctioned loan amount and enables them to use it during a simple and straightforward manner to satisfy their varied needs. “We believe that these new guidelines will make overdrafts more digitally friendly and make the general experience of the end-customer hassle-free and quick,” Roy added.