39.1.1 Usage

Two accounts are captured when handling Hypothecated Deposits. They are:

1. Loan Account with its terms.
2. Deposit Account receiving payment, which is adjusted subject to terms, to repay loan.

These three outcomes occur when loan repayment is made using Hypothecated Deposits:

1. Debtor of the Deposit Account makes payments.
2. Loan continues to accrue interest or as per terms.
3. When deposit amount equals to loan amount, deposit proceeds are transferred to the Loan Account, and then the accounts are closed.