Quick Summary
Hypothecation is a security interest created over movable assets where the borrower retains possession of the property while the lender has a charge over it as security for a loan.
Hypothecation is a security interest created over movable assets where the borrower retains possession of the property while the lender has a charge over it as security for a loan.
Key Characteristics
- Charge on movable property
- Borrower retains possession
- Common in vehicle and inventory financing
Legal Framework
Used when possession transfer is impractical
Key Points
- Charge on movable property
- Borrower retains possession
- Common in vehicle and inventory financing
- Registration under SARFAESI Act for enforcement
- Lender has right to take possession on default
- Used when possession transfer is impractical