What is Mortgage?:

Mortgage secures a loan as it serves as collateral to secure a loan. In general, when immovable property or properties such as land, building, heavy machinery or other types of real estate is offered (through a Registered Mortgage Deed) by a customer (Mortgagor) as security of loan hence a charge thereon is established by means of a 'Mortgage'. It is an agreement (through a Registered Deed) between the mortgagor and mortgagee where mortgagor gives right to mortgagee to possess of the mortgaged property in case of failure to loan payment.

What is Bank Loan Mortgaging?:

In Bank loan mortgaging refers that the borrower gives rights to bank to sell his/her property if fails to pay the borrowed money with interest in time. Hence, mortgage of property here stands as security of loan. Bank cannot deploy its fund without any security. To make secure its fund/loan, Bank takes different types of securities. Presently, in Bangladesh scenario, debtor's property mostly taken as security of loan.

A good security against loan can protect the disbursed fund. Generally, bank deploy/invest its customers deposit to borrower/loan taker. If it does not take proper security such deployed fund will be insecured. Properties such as land, building, heavy machinery, etc. are very lucrative securities for bank to protect its fund from loss.

Loan Mortgaging from banking point of view is that it is an agreement between bank and borrower where borrower gives its rights to sell its property if the borrower fails to pay back taken fund from bank. In the agreement/deed there are a number of clauses through which bank establishes its rights to own or sell borrower's property is he/she fails to pay banks' due.

Download The Transfer of Property Act, 1882 Bangladesh: www.bankingpathshala.com/The-Transfer-of-Property-Act-1882-Bangladesh.pdf

Published Date: 27/05/2023

Updated Date: 03/12/2023