LAW Relating to Securities and MODES of Charge I
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
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What are the two aspects for classifying security effectiveness?
Economic aspect (marketability, valuation) and legal aspect (validity, enforceability).
What are the economic aspects for evaluating a security?
Marketability, valuation, and other economic factors.
What key requisite must a borrower possess for security?
Borrower must have good title to the security.
What legal aspects determine the effectiveness of a security?
Validity and enforceability of the security.
Name three disadvantages of land/real estate as security.
Valuation difficulty, title ascertainment issues, costly charge creation, rent control complications.
Why should a good security not have any encumbrance?
Encumbrances restrict transfer and reduce realisable value.
Distinguish freehold from leasehold property.
Freeholder owns absolutely; leaseholder holds for fixed term derived from freeholder.
Why should a good security not be subject to wide price fluctuations?
Wide fluctuations make valuation and recovery unreliable.
Video classes for this chapter
LAW RELATING TO SECURITIES AND MODES OF CHARGE I
Law Relating to Securities and Modes of Charge-I
Law Relating to Securities and Modes of Charge - I
Law Relating to Securities and Modes of Charge-I
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