Ode to Hypothecation
- An Ode To - Hypothecation Understanding Hypothecation Hypothecation is a legal arrangement widely used in India’s financial system, where a borrower pledges movable assets (such as vehicles, inventories, or receivables) as security for a loan, without transferring possession to the lender. This practice is common in vehicle loans, working capital loans, and other secured credit facilities. The lender holds a right over the hypothecated asset and can seize it if the borrower defaults, but until then, the borrower continues to use the asset for business or personal purposes. Hypothecated To vs. Hypothecated With The terms “hypothecated to” and “hypothecated with” may appear similar but are used slightly differently. When an asset is “hypothecated to” a lender, it implies that the borrower has pledged the asset in favor of that lender. On the other hand, saying an asset is “hypothecated with” a bank is more colloquial, often used in Indian banking communicat...
