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    Securities For Lending

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    Manmeet Malik
    This document discusses types of securities used for lending and the documentation required to create charges over those securities. It notes that liens, pledges, and hypothecations are common methods to create charges over primary, collateral, and personal securities. Proper documentation is essential and precautions must be taken like not lending more than 70-80% of the security's value or allowing multiple loans against the same asset. Documentation establishes rights and obligations, serves as evidence in court, and aids in recovering assets. Requirements include proper signing, stamping, and handling of documents according to Indian law.

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    Securities For Lending

    Uploaded by

    Manmeet Malik
    31 views7 pages
    This document discusses types of securities used for lending and the documentation required to create charges over those securities. It notes that liens, pledges, and hypothecations are common methods to create charges over primary, collateral, and personal securities. Proper documentation is essential and precautions must be taken like not lending more than 70-80% of the security's value or allowing multiple loans against the same asset. Documentation establishes rights and obligations, serves as evidence in court, and aids in recovering assets. Requirements include proper signing, stamping, and handling of documents according to Indian law.

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    securities

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    Securities for Lending

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    This document discusses types of securities used for lending and the documentation required to create charges over those securities. It notes that liens, pledges, and hypothecations are common methods to create charges over primary, collateral, and personal securities. Proper documentation is essential and precautions must be taken like not lending more than 70-80% of the security's value or allowing multiple loans against the same asset. Documentation establishes rights and obligations, serves as evidence in court, and aids in recovering assets. Requirements include proper signing, stamping, and handling of documents according to Indian law.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    31 views7 pages

    Securities For Lending

    Uploaded by

    Manmeet Malik
    This document discusses types of securities used for lending and the documentation required to create charges over those securities. It notes that liens, pledges, and hypothecations are common methods to create charges over primary, collateral, and personal securities. Proper documentation is essential and precautions must be taken like not lending more than 70-80% of the security's value or allowing multiple loans against the same asset. Documentation establishes rights and obligations, serves as evidence in court, and aids in recovering assets. Requirements include proper signing, stamping, and handling of documents according to Indian law.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Securities and documentation

    Type of Securities for lending

    Primary Collateral

    Personal Security

    Methods of Creation of Charge over securities


    Lien: Possession of security belonging to another until the debt is cleared e.g. current account balance Pledge: It refers to bailment of goods as security for payment of debt e.g. shares, debentures, gold. Hypothecation: Possession of security (movable) remains borrower only equitable charge is created e.g. loan against inventory Mortgage: For immovable property

    Precautions while creating charge


    Loan to the value of security should not be more than 7080% Proper documentation is required It should be ensured that the borrower is not taking many loans against same security. For this purpose software namely CERSAI (The Central Registry of Securitisation Asset Reconstruction and Security Interest of India) has asked lenders to centrally feed the security details so that double counting of same security for two different loans can be avoided

    Documentation- Importance
    It is a source of rights & obligations Will become written evidence according to Indian Evidence Act in the court It helps to identify security Are useful for recovering the assets

    Documentation- Requirements
    Should be properly signed Stamping of documents according to provisions of Indian Stamp Act Signatures across revenue stamp Over righting, cutting, insertion, erasing needs full sign Should be filled in one sitting, by one person on one date in one ink Registration Documents under Indian Registration Act 1908: immovable property (buy ,sell, lease, gift) , organizations registration- Companys Act 1956 Mortgage Deed, Guarantee Deed, Power of Attorney Eligibility of parties as per contact act Minor, lunatic, insolvent, drunken, person of unsound mind Special Care: Illiterate People, People not knowing a particular language, Pardanashin Women Types of documents Individual Account Joint Account: all Partnership Firms: all HUF: Karta Companies: person authorized by Board of Directors

    Thank You

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