Question

A Fixed Deposit pledged as collateral for a loan:

• A. Is fully attachable
• B. Is partially attachable
• C. Is not attachable
• D. Is attachable after maturity onl

Answer 1

Answer:

C. Is not attachable

A Fixed Deposit pledged as collateral for a loan is under a charge in favour of the bank. Because of this: The bank has a prior right of lien and set-off over the deposit. The amount is not freely payable to the depositor (judgment debtor). Therefore, no debtor–creditor relationship exists in favour of the customer for that FD at the time of the garnishee order. Hence, a garnishee order does NOT apply to a Fixed Deposit pledged as collateral for a loan. Why other options are incorrect: ❌ A. Fully attachable – Bank’s charge overrides garnishee attachment ❌ B. Partially attachable – Only possible if surplus margin exists; not in a fully pledged FD