25 March 2013
There are some terminologies used by the financial institutions for the collateral security against the loans or the financial facilities provided by such banks etc. the collateral security should be an asset of the person intending to avail the facilities from the bank. 1. If the fixed asset is offered as collateral security, it is called mortgage. Normally in case of long terms loans you will find such arrangements. 2. If the moveable asset is offered as collateral security, it is called pledge. 3. If the stock/ inventory is offered as collateral security, it is called hypothecation. Hoping it will suffice your concerns.
08 April 2013
In case of Mortgage you have to register an agreement of mortgage and all records of revenue authorities are intimated and they er mark as mortgaged and you cannot sale till it is removed. Generally it is applicable to immovable properties such as Land, Building and other Fixed Assets.
In case of pledge which is also called hypothetication the stock is kept with the bank and you are permitted to sale the same with intimation to the Bank. Bank creates a charge which is resisted with ROC if it is a Pvt. Ltd Company or other=wise a deed of hypothecation is executed which is not registered with Registrar but stamp duty is to be paid.
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