📝 One-liners · 65 cards
Types of Collaterals and their Characteristics
What type of charge is created when a borrower physically hands over goods to the bank as security?
Pledge is created when the borrower (pledgor) delivers physical possession of goods to the bank (pledgee) as security for a loan.
When possession of goods is transferred to the banker as in key cash credit, what charge is created?
Pledge
When a trader stores goods in a bank-controlled godown and hands over the keys, what charge is created?
Pledge is created, as the bank gains constructive possession of the goods through control of the godown keys.
When possession of goods is NOT transferred to the bank as in open cash credit, what charge is created?
Hypothecation
🔒
Unlock 65 revision one-liners
Interactive flashcard deck — flip every card to drill questions and answers, mark the ones you got wrong, and revise smarter for Types of Collaterals and their Characteristics.
🪙
Unlock cost
300 coins
30-day access · re-unlocks free for 30 days