XBRL Training
451 Points
Joined March 2007
Pledge & Hypothecation terms are commonly used in banking.
Pledge is a form of security to assure that a person will repay a debt under contract. In Pledge borrower temporarily gives possession of the property to the lender.
Hypothecation is also a form of security in which the borrower offers assets owned by him viz : stocks, bonds, other movable assets as Collateral Security for loan without transferring title to the lender. However, the lender gets a right to sell the property in the event of default by the borrower.