New Delhi, May 29 -- Rich people took short-term loans against their equity portfolios last year to fund business and personal requirements instead of selling their shares at a loss as the Indian stock markets declined.

Interest in products such as loans against securities (LAS) and loans against mutual funds (LAMF) offered by banks and non-banking finance companies has been on the rise, as reflected in the loan books of lenders. With such products, individuals pledge their shares or mutual funds as collateral to borrow funds.

High net worth individuals and ultra-HNI clients have started using the LAS facility very actively, said Vikas Satija, managing director and CEO of Shriram Wealth. There are two broad use-cases: creating short-ter...