1.1 About Collateral Substitution

A brief introduction to the collateral substitution process.

Collateral Substitution is the process of substituting the pledged collaterals of one type in bank's charge with the pledged collateral of the same or other type. Collateral substitution is done on certain circumstances, some of which include:

• Reselling of collateral by the customer
• Another collateral of higher or lower value is submitted by the customer based on limit amount
• Bank requests for substitution due to the reduction in collateral value