What is Pledge? Very Important Concept JAIIB in Hindi - Banking Regulations And Business Law
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 pledges are Gold /Jewellery Loans, Advance against goods,/stock, Advances against National Saving Certificates, etc.
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