InvestorQ : How do I pledge my shares to raise a loan?
Priyanka N made post

How do I pledge my shares to raise a loan?

Answer
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Niraja Mehta answered.
2 years ago


If you want to pledge your shares with the bank then the first step is that you will have to make an agreement with the bank or your financer who is going to fund you against your holding in shares.
After the agreement is done with your finances, an agreement number is mentioned in the Pledge Request Form which has to be sent to DP. The DP will then approve the pledge based o the fitness of all documents.
Pledgor and the Pledgee must have a beneficial account with the same depository as the inter-depository pledge is presently not permitted. That means either both should be in NSDL or both should be in CDSL. For example, if your financer has a DP account with NSDL and you have CDSL, then the pledge is not possible.
DP department once verifies the request from their end & Initiate the Pledge creation. Then after Pledgee (Counterparty Account holder) requires to Accept/Confirm the pledge creation on the basis of Generated Pledge Order no. to complete the Pledged Transaction.
Pledged shares remain in Pledgor’s demat account under the Pledged status which was nontransferrable till Pledged shares are closed/Released. Once the pledge is closed it is revoked and the shares are free once again.