Lien ↗️

Lien is the right given to the lender over a security to recover the money in case the credit given to the borrower is not repaid as per the terms agreed to. In the case of loan against mutual funds, the lien is marked by the lender on the units offered as security.

Pledge 🔮

Users can pledge their assets by lien marking. The lien gives the right to the lender to liquidate the units of the mutual funds so marked if the borrowers fails to service loans. When the units are marked under lien, the investor cannot switch or redeem those units. The underlying investments continue to receive the payoffs in the form of dividends or otherwise, as proposed by mutual funds. Dividends are paid to the investors, when the units are held under lien.

Invoke 🔀

The lender can invoke the lien by writing to the fund house either for all units or for parts thereof.

The assets of the user can briefly be invoked in the following scenarios by the lender:

a) The user passed given DPD (days passed due) of EMI
b) The value of the assets fall below the invoke limit

Revoke ◀️

The term "revoke" means to officially cancel, withdraw, or annul something. It is often used in various contexts, including legal, contractual, and administrative situations. Here the term is being used in the context of revoking the pledged assets of the users. The assets of the user can briefly be revoked in the following scenarios by the lender:

a) The loan was not disbursed to the user after lien marking the assets
b) The loan was repaid by the user