单选题
A bank has different kinds of security as cover for advance to its customers. There are several ways in which a bank may take security for an advance by lien, pledge, mortgage and hypothecation.
In the case of an ordinary lien, the borrower is stile the owner of the property, but the creditor (bank) is in actual or constructive possession of the property, without as a rule having a right to sell it. The securities subject to the bank"s lien are those which come into a bank"s hands in the ordinary course of its business, for example, bills, cheques and other negotiable instruments deposited with the bank in order that it may collect file proceeds.
Pledge is the characteristic model of taking goods as security. It arises when goods (or documents of title thereto) or bearer securities are delivered by one person (called the "pledgor") to another person (called the "pledgee") to be, held as a security for the payment of a debt or for the discharge of some other obligation, upon the express or implied undertaking that the subject matter of the pledge is to be restored to the pledgee as soon as tile debt or other obligation is discharged. The pledgee is entitled to the exclusive possession of the property until the debt is discharged, and the pledgee, in certain circumstances, has the power of sale, but the ownership remains in the pledgor, subject to the pledgee"s right. Securities subject to pledge are goods and chattel and fully negotiable securities. Delivery of possession may be either actual or constructive.
Essentially, mortgage is an assignment or charge of some interest in land or other property, as security for the payment of a debt or the discharge of some obligation for which it is given subject to a right of redemption (or equity of redemption), discharge of the obligation the interest conveyed (or charged) shall be reconveyed (or discharged). The mortgagee has a special interest in the property, and also a power of sale, but the possession of the property usually remains with the mortgagor unless and until there is a default and the mortgagee enters into possession, which is rare, or exercises any of his other remedies. Securities subject to mortgage are title deeds, life policies, and stocks and shares and others chosen in action.
Hypothecation is a transaction whereby goods may be made available as security for a debt without transferring either the property or the possession to the lender. There is risk of lending against the hypothecation of goods. Since the lender does not obtain actual or constructive possession of the goods, his measure of control over them is often very limited, giving the borrower an easy opportunity of dealing with them fraudulently.