Types of bank charges
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is a 'bank charge' in the context of lending operations?
A bank charge is a fee or cost levied by a bank on a borrower as consideration for providing credit facilities, processing loans, or maintaining security over assets.
What is a 'mortgage by conditional sale' under the Transfer of Property Act?
Mortgagor sells property conditionally, to be retransferred on repayment.
What is a 'lien' as a type of bank charge?
A lien is the right of the bank to retain possession of goods or securities belonging to the borrower until the debt owed is repaid, without the right to sell.
What is an 'anomalous mortgage' under Indian law?
A mortgage not falling under any other defined category in the Act.
How does a 'pledge' differ from a 'lien' as a bank charge?
In a pledge, the borrower delivers possession of movable goods to the bank as security, and the bank (pledgee) has the right to sell the goods on default, unlike a lien where no such sale right exists automatically.
What is the key feature of a 'pledge' as a bank charge?
Physical possession of goods is transferred to the bank as security.
What is a 'hypothecation' charge in bank lending?
Hypothecation is a charge created on movable assets where possession remains with the borrower but the bank has a right over the asset as security; commonly used for stock-in-trade and vehicles.
Under which Act is the law relating to pledge governed in India?
The Indian Contract Act, 1872 governs pledge.
Video classes for this chapter
More chapters in Module B - Lending Operations of Banks
Master the full PPB syllabus
Every chapter of Principles and Practices of Banking — videos, tests, notes and one-liner decks in one place.