Documents of Title to Goods:
A document of title to goods is a negotiable or quasi-negotiable instrument. According to section 2(4) of the Sale of Goods Act, 1930, a
document of title is any document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive the goods represented thereby. Documents of title include:
Bill of lading
Railway receipt
Transporter’s receipt
Dock warrant
Warehouse-keeper’s certificate
Wharfinger’s receipt
Warrant or order for delivery of goods
Before being pledged with the bank, these documents have to be appropriately endorsed in favour of the bank.
Gold Ornaments and Bullion
Gold ornaments are accepted by banks as security on the basis of assessor’s certificate regarding the content, purity and weight of gold and the
value thereof. Valuation, however, keeps changing as a result of market fluctuations. Loans are given only on the basis of gold content of ornaments,
no regard being had to labour charges. RBI has, vide its Master Circular No. DBR.No.Dir.BC.10/13.03.00/2015-16 on Loans and Advances-Statutory and
Other Restrictions dated July 1, 2015, directed banks to give preference to hallmarked jewellery for granting advances. RBI has, vide its Circular No.
DBOD.BP.BC.No.86/21.01.023/2013-14 on “Lending against Gold Jewellery” dated January 20, 2014, issued guidance in respect of Advances against Gold Ornaments and Jewellery for the purpose of Medical Expenses and Meeting Unforeseen Liabilities”. In this context, attention of the readers is also invited to RBI’s Circular No. DBOD.No.BP.79/21.04.048/2013-14 on “Non-Agriculture Loans against Gold Ornaments and Jewellery” dated December 30, 2013 containing guidelines on bullet repayment of loans extended against pledge of gold ornaments and jewellery for other than agricultural purposes.