39.1 Hypothecated Deposits

Hypothecated Deposit is the sum of installments paid to a deposit account, which is netted against loan account. The amount paid to the deposit account does not reduce immediately to pay off the loan installment, however, it accumulates until the total principal and interest amount of the loan is reached. The amount is paid in full and loan account is closed only after deposit balance reaches the total value of the loan. Hypothecated deposits must be netted against the related loans. Deposits, which serve as collateral for loans, are not considered hypothecated deposits.