Banking · Types of Borrowers & Credit Facilities
In a situation where a bank holds a customer's shares as security for a loan that has remained unpaid, the bank decides to sell the shares after giving notice. What is the legal status of the bank and the customer in this scenario?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The bank is an Agent and the customer is a Principal.
- 2The bank is a Mortgagee and the customer is a Mortgagor.
- 3The bank is a Pledgee and the customer is a Pledgor.✓
- 4The bank is a Bailee and the customer is a Bailor.
Correct answer
The bank is a Pledgee and the customer is a Pledgor.
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