MODES OF CHARGING SECURITIES | LIEN -HYPOTHECATION- PLEDGE- ASSIGNMENT | CSEB/PSC EXAM POINT | JCI

Описание: Modes of charging securities are methods banks use to secure loans by creating a claim (charge) on a borrower's assets, primarily involving Pledge, Hypothecation, Mortgage, and Lien, plus others like Assignment and Set-off, differing mainly by possession of the asset (movable/immovable) and the extent of rights transferred to the lender.

Key Modes of Charging Securities:

Pledge:
What it is: A bailment (delivery) of movable goods as security for a debt.
Possession: Transferred to the lender (pledgee).
Example: Depositing gold jewelry or share certificates with a bank.

Hypothecation:
What it is: Creating an equitable charge on movable property without transferring possession.
Possession: Stays with the borrower, but the lender can take possession if default occurs.
Example: Loans against stock, inventory, or vehicles (where borrower keeps using it).

Mortgage:
What it is: Transferring an interest in immovable property (land, buildings) to secure debt.
Possession: Varies (simple mortgage, deposit of title deeds), but legal interest is transferred.
Example: Home loans or commercial property loans.

Lien:
What it is: The right to retain possession of goods or documents belonging to the borrower until the debt is paid.
Possession: Lender holds the property.
Example: A lawyer holding client documents or a bank retaining fixed deposit receipts for a loan.

Assignment:
What it is: Transferring the right to receive debts (actionable claims) or other property to the lender.
Example: Assigning book debts or future receivables.


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