CAIIB Paper 4: Banking Regulations and Business Laws (BRBL)

Q: Under Indian banking law, what is the crucial distinction between a "Pledge" and a "Hypothecation"?

Correct Answer: Option B (In a Pledge, actual or constructive possession of movable goods is delivered to the lender, whereas in Hypothecation, possession remains with the borrower). Section 172 of Indian Contract Act: Pledge requires delivery of possession of goods to the creditor (pledgee). Under Section 2(1)(n) of SARFAESI Act: Hypothecation creates a charge on movable assets without delivery of possession.

1 Questions (Mod B) 4 Modules

Practice CAIIB Paper 4: Banking Regulations and Business Laws (BRBL) - Module B (Legal Aspects of Banking Operations) multiple choice questions with detailed step-by-step explanations.

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