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Are Government securities eligible for creation of pledge, hypothecation or lien?

April 26, 2017creation eligible government hypothecation lien pledge securities

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Are Government securities eligible for creation of pledge, hypothecation or lien?

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Yes. Pledge, hypothecation or lien may be created in respect of Government securities held in the form of SC, BLA, SGL/CSGL and the holder of Government securities in such forms may avail of loan facility by keeping such securities as collateral towards loan, subject to the stipulation mentioned in question no. 34. However, Government securities issued in the form of Government promissory note and bearer bonds are not eligible for creation of pledge, hypothecation or lien.