Module: | Guarantee, Indemnity, and Bailment
Q10: Banks often use a contract of indemnity, to protect themselves from loss. Which of the following is NOT a typical situation, where a bank would take an indemnity?
✅ Correct Answer: C
An indemnity is a promise to compensate for potential loss.
It is standard procedure for lost instruments (duplicate DDs, FDRs, lost cheques) or lost locker keys.
Granting a new term loan against property is secured using a mortgage or hypothecation, not an indemnity bond.
It is standard procedure for lost instruments (duplicate DDs, FDRs, lost cheques) or lost locker keys.
Granting a new term loan against property is secured using a mortgage or hypothecation, not an indemnity bond.