In the case of the pledge, the goods are placed in custody of the bank with its name on the god own where they are stored. The borrower has no right to deal with them.

Customers favor hypothecation to pledge because the latter is considered to tower his prestige.

If someone pledges goods, they let a second person take possession of the goods, but the person pledging the goods still owns them.  It is often done as security for money owed or to make sure that something is done as promised.

Webster Dictionary Meaning

1. Pledge
- The transfer of possession of personal property from a debtor to a creditor as security for a debt or engagement; also, the contract created between the debtor and creditor by a thing being so delivered or deposited, forming a species of bailment; also, that which is so delivered or deposited; something put in pawn.
- A person who undertook, or became responsible, for another; a bail; a surety; a hostage.
- A hypothecation without transfer of possession.
- Anything given or considered as a security for the performance of an act; a guarantee; as, mutual interest is the best pledge for the performance of treaties.
- A promise or agreement by which one binds one's self to do, or to refrain from doing, something; especially, a solemn promise in writing to refrain from using intoxicating liquors or the like; as, to sign the pledge; the mayor had made no pledges.
- A sentiment to which assent is given by drinking one's health; a toast; a health.
- To deposit, as a chattel, in pledge or pawn; to leave in possession of another as security; as, to pledge one's watch.
- To give or pass as a security; to guarantee; to engage; to plight; as, to pledge one's word and honor.
- To secure performance of, as by a pledge.
- To bind or engage by promise or declaration; to engage solemnly; as, to pledge one's self.
- To invite another to drink, by drinking of the cup first, and then handing it to him, as a pledge of good will; hence, to drink the health of; to toast.
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