Which side the facility sits on
The first decision is jurisdiction: borrow in India against Indian securities, or borrow offshore against an offshore portfolio. Account type, permitted end-use, repatriability of proceeds and tax treatment all follow from that choice, and reversing it later is expensive.
Enforceability
A lender needs a security interest it can act on where the asset sits. In practice that means local counsel, a local security document, and often a security trustee or local co-lender. A cross-border pledge that has not been tested against local enforcement law is the most common reason a promising mandate stalls late.
Currency mismatch
A facility drawn in one currency against collateral valued in another creates an effective margin trigger from exchange-rate movement alone. Either the borrowing currency matches the collateral, or the covenant carries headroom sized for realistic currency swings — not for a calm year.
Trust-held assets
Assets inside a discretionary trust can support borrowing, but the trust deed governs what the trustee may pledge and how distributions are treated. Trust and tax counsel are engaged at the outset rather than after a term sheet — that single sequencing choice is usually the difference between a six-week and a six-month process.
- Jurisdiction and account type settled before lenders are approached
- Local security document and enforceability opinion
- Borrowing currency matched to collateral where possible
- Trustee powers and distribution treatment confirmed in writing
Common questions
Can an NRI borrow against securities held in India?
Yes. Account type, permitted end-use and repatriability of proceeds depend on whether the facility sits onshore or offshore, so that decision is made before lenders are approached.
Can offshore or trust-held assets secure a loan?
They can, provided the lender has a security interest enforceable where the asset sits and the trust deed permits the trustee to pledge. Local counsel and an enforceability opinion are standard.
How is currency risk handled on a cross-border facility?
Either the borrowing currency matches the collateral currency, or the margin covenant carries headroom sized for realistic exchange-rate movement. Otherwise currency alone can trigger a top-up.
Every facility described here is arranged case by case, across our full range of mandates and using the desk process. A first conversation is confidential and carries no obligation.
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