Consider the following statements regarding banking and legal aspects of collateral securities in India: Statement 1: 'Mortgage' is defined under Section 58 of the Transfer of Property Act 1882. An Equitable Mortgage involves delivering title deeds to the creditor with intent to create security, and it does not necessarily require a registered deed unless mandated by state-specific laws. Statement 2: Collateral securities are classified into primary security (asset created out of bank finance) and secondary security (additional assets pledged like property or fixed deposits). Statement 3: Charging of securities involves 'Set-off' (statutory right to combine accounts in the same right) and 'Assignment' (transfer of an actionable claim under Section 130 of the Transfer of Property Act). Which of the following options is accurate?

Question

Accepted Answer

All three statements are correct and provide an accurate overview of charging collaterals in Indian banking.

Answer

Only Statement 2 is correct, as Statement 3 confuses the definition of Set-off with Banker's Lien.

Answer

Statements 2 and 3 are correct, but Statement 1 incorrectly identifies the governing section of the Transfer of Property Act.

Answer

Statement 1 is false because Equitable Mortgages must be registered in all rural and urban areas without exception.

Download Single Question PDF

Share with Friends & Study Groups

Preparing for General Studies?

Practice by Subject

Practice by Exam

Topic-Wise Solved Questions