39.1.2 Inferences

These are inferences based on the Hypothecated Deposits usage:

• Deposit Account operates as a normal Deposit Account.
• Loan continues to operate as a normal Loan Account.
• The core banking or source system executes deposit proceeds, which is used to repay loan, as per the configured rules.
• Until the closure of loan, deposit functions as a mitigant such that, in the event of customer defaulting, the deposit balance is used to repay the loan.