Statutory definitions

Collateral and collateral agreement means

“collateral” means-

(i) money, in the form of cash, credited to an account in any currency, or a similar claim for repayment of money, such as a money market deposit;

(ii) securities of any kind, including debt and equity securities;

(iii) guarantees, letters of credit and obligations to reimburse; and

(iv) any asset commonly used as collateral under any law for the time being in force;

 “collateral arrangement” means-

any margin, collateral or security arrangement or other credit enhancement related to or forming part of a netting agreement or one or more qualified financial contracts to which a netting agreement applies, and includes,-

(i) a pledge or any other form of security interest in collateral, whether possessory or non-possessory;

(ii) a title transfer collateral arrangement; and

(iii) any guarantee, letter of credit or reimbursement obligation by or to a party to one or more qualified financial contracts, in respect of those qualified financial contracts; or a netting agreement;

Ref : Bilateral Netting of Qualified Financial Contracts Act 2020

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