RRB PO Interview (2016-2017)

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Hiii Future Po's. Here is our for discussion regarding RRB PO interview going to be held on Jan 2017. I am from Telangana

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Pledge, Hypothecation, Lien and Mortgage. These terms are used for creating a charge on the assets which is given by the borrower to the lender as a security for any loan. Thus, one of these terms will be normally used whenever an individual or a business firm avails any loan and the bank keeps some assets as a security, so that it will be able to sell the same in case that individual or the firm defaults in repayments. Pledge: Pledge is used when the lender (pledgee) takes actual possession of assets i.e. certificates, goods ). Such securities or goods are movable securities. In this case the pledgee retains the possession of the goods until the pledgor (i.e. borrower) repays the entire debt amount. In case there is default by the borrower, the pledgee has a right to sell the goods in his possession and adjust its proceeds towards the amount due (i.e. principal and interest amount). Some examples of pledge are Gold /Jewellery Loans, Advance against goods,/stock, Advances against National Saving Certificates etc. Hypothecation: Hypothecation is used for creating charge against the security of movable assets, but here the possession of the security remains with the borrower itself. Thus, in case of default by the borrower, the lender (i.e. to whom the goods / security has been hypothecated) will have to first take possession of the security and then sell the same. The best example of this type of arrangement are Car Loans. In this case Car / Vehicle remains with the borrower but the same is hypothecated to the bank / financer. Mortgage : Mortgage is used for creating charge against immovable property which includes land, buildings or anything that is attached to the earth or permanently fastened to anything attached to the earth (However, it does not include growing crops or grass as they can be easily detached from the earth). The best example when mortage is created is when someone takes a Housing Loan / Home Loan. In this case house is mortgaged in favour of the bank / financer but remains in possession of the borrower, which he uses for himself or even may give on rent. Lien: It is defined to be a right of detaining the property of another until some claim be satisfied. Pledge : ownership with the bank . E.g. : goldloan Hypothecation : ownership with the customer only but possession is with the bank. E.g. : car loan Lien : certain amount is marked by the bank which customer won't able to withdraw the money but he will get the interest for that Note--- Movable Assets---Pledge, Hypothecatn, lien Immovable Assets---Mortgage Possessd by lenders-- Pledge, Lien Possesd by Borrowers--Hypothecatn, mortgage

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