26 November 2022
Dear sir, We used to purchase Bank Guarantee, Letter of credit from financial institution or bank depositing 100 % margin as deposit during duration of Bank Guarantee or Letter of credit. Bank will create lien on fixed deposits. I need advice from expert team, 1. whether creating lien on Fixed deposit is termed as encumbursence of asset of company. 2.whether bank is under obligation create charge @ roc/MCA
26 November 2022
1 yes, it's encumbrance of the asset of the company. 2 Deposit of a fixed deposit receipt with the Bank by way of security for a loan amount to pledge of movable property. There is required to create charge on pledge under Companies Act, 2013. Conclusion, So it need to be registered.
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