Can shares be mortgaged?

Mortgage of Shares means any mortgage of or security interest in shares in the capital of any Borrower or Obligor securing the obligations of such Borrower or Obligor in respect of any Loan.

Can shares be pledged as collateral for loans?

Definition: Pledging of shares is one of the options that the promoters of companies use to secure loans to meet working capital requirement, personal needs and fund other ventures or acquisitions. A promoter shareholding in a company is used as collateral to avail a loan.

What can be mortgaged?

What Properties Can be Mortgaged?

  • Housing & Commercial Property. The Transfer of Property Act deals with the mortgaging of immovable property, which includes house, land, commercial property etc. …
  • Land. …
  • Gold Coins & Jewellery. …
  • Other movables – can they be mortgaged?

What is equitable share mortgage?

An equitable mortgage of shares is created by depositing the share certificates with the lender or a security trustee appointed by the lender. Where an equitable mortgage is created, legal title to the shares is not transferred to the mortgagee (bank or security trustee).

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What is the difference between pledge and mortgage?

So, in short, mortgage is a term that is used for fixed assets like land, buildings, apartments etc. When you pledge your shares, they would still remain with you and you would be entitled to dividends etc. However, when you mortgage your apartment, the documents would remain with the lender.

Can shares be pledged?

In simple words, pledging of shares means taking loans against the shares that one holds. Shares are considered assets. Pledging of shares is a way for the promoters of a company to get loans to meet their business or personal requirements by keeping their shares as collateral to lenders.

Can I sell shares if they are pledged?

If you have traded with Collateral margins & incurred a loss, you will need to bring in additional funds to make up for the MTM loss. In case you don’t the RMS team could sell your pledged shares to make up for the loss. … Day 4: We sell the unpledged shares to clear the debt amount.

Can mortgagor sell mortgaged property?

According to section 58(b), in a simple mortgage, the mortgagor assures mortgagee that he shall repay the loan amount and in the event of default, he shall bind himself personally to sell the mortgaged property and thereby repay the loan amount.

Who owns a mortgaged property?

A mortgage is a temporary transfer of property in order to secure a loan of money. The person who owns the land is the ‘mortgagor’. The person lending the money is the ‘mortgagee’.

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Who grants a mortgage?

Mortgagor: A person who grants a mortgage interest; the borrower of a mortgage loan. Mortgagee: A person who receives a mortgage interest; the lender of a mortgage loan.

Are shares fixed or floating charge?

A fixed charge is a charge or mortgage secured on particular property, e.g. land and buildings, a ship, piece of machinery, shares, intellectual property such as copyrights, patents, trade marks, etc. A floating charge is a particular type of security, available only to companies.

How many types of mortgages are there?

Mortgage loans in India are available under 6 different mortgage types. Under Section 58(a) of the Transfer of Property Act, 1882, mortgage’s definition stands as a specific immovable property’s transfer of ownership to secure payment of funds against it, extended as a mortgage loan in the form of credit.

Is a mortgage a conveyance?

Conveyance is a general term that applies in a legal sense beyond residential real estate. … The documents provided for conveyancing typically include the deed, mortgage documents, certificate of liens, the title insurance binder, and any side agreements related to the sale.

What is hypothecation and mortgage?

Mortgage implies a legal process wherein the title of real estate property passes from the owner to the lender, as a collateral for the amount borrowed. Hypothecation refers to an arrangement, wherein a person borrows money from bank by collateralizing an asset, without transferring title and possession.

What is sarfaesi?

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI). Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDBFI).

Can shares be hypothecated?

Securities held in a depository account can be pledged/hypothecated to avail of loan/credit facility.

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