NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Pledge and Hypothecation
Mr. Raghav Iyer pledges 500 shares held in his demat account to Axis Bank as security for a loan. In depository terminology, what is Mr. Iyer called in this pledge transaction?
Mr. Iyer is the pledgor. The pledgor is the beneficial owner who offers securities as collateral for a loan, while the lender who accepts the securities as security is called the pledgee, here Axis Bank.
- APledgorCorrect
- BPledgee
- CHypothecator
- DClearing member
Explanation
The BO who creates a pledge over securities and offers them as security is the pledgor. The lender receiving the security interest is the pledgee. Mr. Iyer is borrowing, so he is the pledgor.
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