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LAW RELATING TO SECURITIES AND MODES OF CHARGE II
What is a pledge in the context of banking security?
A pledge is the bailment of goods as security for payment of a debt or performance of a promise. The pledgor transfers possession of goods to the pledgee (bank) while retaining ownership.
What is the meaning of 'charge' in the context of secured lending?
Security interest created over borrower's property in favor of lender.
What is the key difference between a pledge and a hypothecation?
In a pledge, physical possession of goods is transferred to the creditor (bank), whereas in hypothecation, the borrower retains possession and the charge is created without transfer of possession.
What is a simple mortgage under the Transfer of Property Act?
Borrower binds himself personally without delivering possession to mortgagee.
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