|
Sl no |
Pledge |
Hypothication |
|
1 |
Incase of pledge ,bank take the possession of the goods but ownership remain to the debtor |
For hypothecation, possession remains with the borrower
but owner
is bank |
|
2 |
Both the pledge and pledgor
conduct an aggremnet about agreement for pledge of goods and produces |
Both the financer
and the debtor conduct an agreement about hypothecation of
goods and produces. |
|
3 |
The pledgee can retain the possession |
In case of
hypothecation The |
|
|
of the goods
until the pledgor repays the entire debt amount and in case of a
default, the pledgee has the right to sell the goods in his possession and adjust its proceeds towards the amount due. |
possession and the ownership remain with the borrower and so, he may, at any time either create a subsequent charge by way of
pledge over same
goods or may
sell them. |
|
4 |
There are two types of pledge. 1.actual pledge; 2. Constructive
pledge |
Hypothecation has no types. |
|
5 |
For safety of pledge product, bank appoint security guard |
For safety of hypothecated product, owner ownself
arrange the security
of the product |
|
6 |
Risks for Pledged goods
as
goods may stolen, perish, burn by fire or damage
any other
way |
If occurs such type of
damage collateral security help to recover the loan. |