Definition
Additional security provided to a lender besides the primary security. In banking, collateral often includes personal guarantees of directors/promoters, fixed deposits, insurance policies, or additional immovable property pledged alongside the primary asset. SARFAESI enforcement can proceed against all charged assets simultaneously.
Related Terms
Security Interest
A right, title, or interest of any kind upon property created in favour of a secured creditor as a s…
Mortgage
A transfer of interest in immovable property as security for the repayment of money. The Transfer of…
Pledge
The delivery of movable goods (shares, FDRs, gold, commodities) by a borrower (pledgor) to a lender …
Guarantor
A person who gives a guarantee to repay a debt if the principal borrower defaults. In banking, perso…
Need Expert Advice on Collateral Security?
For specific advice on how Collateral Security applies to your debt recovery matter, consult Advocate Subodh Bajpai — LLM, MBA (XLRI Jamshedpur). 25+ years of exclusive banking and debt recovery practice across DRT, SARFAESI, IBC, and NI Act.
Defined by Advocate Subodh Bajpai, Senior Partner, Unified Chambers and Associates