Glossary:


Term - H : Hypothecation

Hypothecation


Hypothecation

Hypothecation is a charge that is created on a movable assets as security for a debt. Unlike a Pledge, where the possession of the asset is with the bank, in the case of hypothecation, possession remains with the borrower. Advance against gold ornaments is typically a pledge, whereas advance against stocks, book debts, machinery and vehicles are usually covered by a hypothecation charge.
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