Module: General Practice
Q103: Which of the following is NOT a standard document or procedure required for the creation of a valid "Hypothecation" charge on the movable assets (stocks/receivables) of an SME borrower?
✅ Correct Answer: B
In Hypothecation, the possession of the goods remains with the Borrower.
The bank only has a constructive charge (right to seize in default). If "Physical delivery of possession" were required, it would be a Pledge (e.g., Gold Loan), not Hypothecation.
Registration with CERSAI is now mandatory for security interests created over movable and immovable properties to prevent multiple financing.
The bank only has a constructive charge (right to seize in default). If "Physical delivery of possession" were required, it would be a Pledge (e.g., Gold Loan), not Hypothecation.
Registration with CERSAI is now mandatory for security interests created over movable and immovable properties to prevent multiple financing.