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    Question

    What does the term "hypothecation" refer to as per the

    SARFAESI Act?
    A A transfer of ownership of movable property to a secured creditor Correct Answer Incorrect Answer
    B A charge created by a borrower on movable property without delivery of possession to the creditor, as security for financial assistance Correct Answer Incorrect Answer
    C A pledge of movable property by delivering possession to the creditor Correct Answer Incorrect Answer
    D A mortgage on immovable property as security for financial assistance Correct Answer Incorrect Answer
    E A sale agreement for movable property between a borrower and creditor Correct Answer Incorrect Answer

    Solution

    Section 2 Definitions: (n) “hypothecation” means a charge in or upon any movable property, existing or future, created by a borrower in favour of a secured creditor without delivery of possession of the movable property to such creditor, as a security for financial assistance and includes floating charge and crystallisation of such charge into fixed charge on movable property

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