Tag: Organizational Behaviour

Retail internationalization is the transfer of retail operations outside the home market. It involves the international transfer of retail concepts, management skills, technology and even the buying function.

International trade and commerce has existed for centuries and played a very important part in the World History. However International Retailing has been in existence and has gained ground in the past two to three decades. The economic boom in several countries, coupled with globalization have given way to Organizations looking at setting up retailing across borders. The advent of internet and multimedia has further changed the dimensions as far as International Retailing is concerned.

The international perspective in retail business involves understanding and navigating the complexities of operating in diverse global markets. Retailers expanding internationally must consider cultural nuances, regulatory environments, consumer behaviors, and economic conditions unique to each country.

The international perspective in retail business involves a nuanced understanding of diverse markets and the ability to adapt strategies to local conditions. Successful global retailers prioritize cultural sensitivity, comply with local regulations, and leverage technology to navigate the complexities of operating on a global scale. By combining a deep understanding of local markets with a strategic and flexible approach, retailers can establish a strong international presence and capitalize on global opportunities.

Factors involved in International Retailing

A careful examination of the definition for international retailing reveals certain concepts which are key to the process of international retailing. These include operations, concepts, management expertise, technology and buying.

1. Operations

Retail internationalization is the expansion of a retailer’s operations into a foreign market. The store format may or may not be similar to that in the home market. Identical operations may well trade under a different brand than that operated in the domestic market. This decision is largely dependent upon the method of market entry. On the acquisition of a foreign retail operation, the new owner may retain the original brand if it is a respected brand.

For example, in 1999 Wal-Mart (the retail giant) bought UK grocery chain ASDA and retained the original ASDA brand. When a retailer enters a new market by franchise, it may transfer an established domestic brand. Sometimes, a new foreign brand is perceived as more fashionable than its competitors.

2. Concepts

Retail concepts lay emphasis on innovations in the industry. The self service concept first emerged in California in 1912. Later, the concept was followed in a number of international markets in the next two decades. Similarly, the convenience store format which originated in USA in 1920s was taken up in Europe in the 1970s. Now, the focus in on globalization. The retail concept currently by operated by retailers may also become successful in a foreign market.

The internationalization of “the body shops” popularized the idea of environmentally sensitive products. The success of such concepts have been adopted by competitors spawning of similar retail offers in natural toiletries and cosmetics.

3. Management expertise

The transfer of concepts is linked with the internationalization of management expertise. This encompassed the internationalization of skills and techniques used in the management of the business. Formation of alliances is an important means of transferring management functions. Retail alliances are prompted by operational synergies, buying economies of scale, increased retailer power over manufacturer, the development of retailer own labels and joint defense building against the market entry of foreign competitors.

International retail alliances are the direct outcome of growing globalization. Successful alliance management rests on close cooperation, communication, synergistic performance measures and an agreement to common objectives.

4. Technology

Retailers who operate internationally require the use of technology advances. Use IT in central management of retail operations has improved its decision making in areas such as finance, personnel and logistics. Technologies such as EPOS (Electronic Point of Sale) are also used at operational levels of retail stores.

Generally, internationalization will employ relatively advanced technology. It is preferable for retailers to move into a market where they have a technological advantage. Technological advantage in turn, would confer a competitive advantage over indigenous retailers.

5. Buying

The proportion of consumer expenditure on retail is considerably important. As the population becomes more wealthy a greater proportion of income is spent on non-essentials. Only a small percentage of total spend goes on food and clothing. A higher share of spending power is directed towards non-essentials such as holidays and leisure activities. In retail operations the function of buying is indeed sourcing. Sourcing has had the greatest impact in terms of internationalization.

Alliances are formed to attain efficiency and leverage in sourcing. International retailers use their collective influence with suppliers to reduce prices and improve quality. For example, the European alliance EMD has stated exerting the combined purchasing power of its members as its primary objective.

Reason for Internationalization of retailing

1. Inadvertent internationalization

Inadvertent internationalization is due to political instability. Sometimes, changes in the demarcation of national borders take place. This may mean a retail company is operating in a different market although its stores have not physically moved. Changes in Eastern Europe are the examples of this kind. The US retailer KMart entered Czechoslovakia. Within a year it found itself operating in two district markets, the Czech and Slovak republics.

2. Non-commercial reasons

Non-commercial reasons of political, personal, ethical or social responsibility have motivated retailers to move into foreign markets. For example, retailers foray into markets for reasons of social and environmental responsibility. Notably, the Body Shop’s “trade not aid” sourcing policy helped develop infrastructures in order to stabilize economics.

3. Commercial objectives

It include entering the market which gives retailers competitive edge. Gaining important market knowledge before moving in on a larger scale learning about innovations may be other commercial objectives of retail internationalization.

4. Government regulations

Government regulations influence the choice of market by retailers. It is not a prerequisite to internationalization. Retailers prefer the markets with fewer restrictions on their growth. Severe regulations at home push retailers into the international arena. Loi Royer in France severely restricted the development of large out of town stores. As a result the French hypermarkets turned to less restrictive markets to continue their expansion.

5. Growth potential

Retailers seek the best growth potential possible. If they perceive profitable opportunities in overseas markets, they are likely to capitalize on them.

International Perspective in Retail Business

1. Globalization and Market Expansion:

• Market Entry Strategies:

Retailers may choose from various entry strategies, including franchising, joint ventures, acquisitions, or establishing wholly-owned subsidiaries, depending on the level of control desired and the nature of the market.

• Global Supply Chains:

Managing global supply chains is crucial, involving coordination of sourcing, production, and distribution across different countries. Retailers often optimize supply chain efficiency to reduce costs and enhance flexibility.

2. Cultural Sensitivity and Localization:

• Understanding Cultural Differences:

Cultural factors significantly impact consumer preferences, shopping habits, and communication styles. Successful retailers adapt their strategies to align with local cultural norms and values.

• Localization of Products and Services:

Retailers often tailor their product offerings and services to meet local tastes and preferences. This may involve adapting packaging, marketing messages, and even the assortment of products.

3. Regulatory and Legal Considerations:

• Compliance with Local Regulations:

International retailers must navigate diverse regulatory landscapes, including tax laws, employment regulations, and trade restrictions. Understanding and complying with local laws are critical for sustained success.

• Trade Barriers and Tariffs:

Retailers need to be aware of trade barriers, tariffs, and import/export regulations that may impact the cost and availability of goods.

4. Economic Conditions:

• Currency Fluctuations:

Global retailers face exposure to currency fluctuations, which can impact pricing, profitability, and financial performance. Hedging strategies may be employed to manage currency risk.

• Economic Stability:

Economic conditions in different countries influence consumer purchasing power and spending behavior. Retailers must be adaptable to economic fluctuations and tailor strategies accordingly.

5. Technology and E-commerce:

• E-commerce and Digital Platforms:

The growth of e-commerce enables retailers to reach international consumers without significant physical infrastructure. Online platforms provide opportunities for market entry and global reach.

• Technology Adoption:

The adoption of technology varies globally. Retailers need to assess the digital maturity of each market and adapt their technology strategies accordingly.

6. Competitive Landscape:

• Local and Global Competition:

Retailers face competition from both local players and other international brands. Understanding the competitive landscape is crucial for market positioning and differentiation.

• Partnerships and Collaborations:

Forming strategic partnerships with local businesses or entering collaborations with established players can facilitate market entry and enhance competitiveness.

7. Consumer Behavior and Trends:

• Diverse Consumer Behaviors:

Consumer preferences and behaviors differ across countries. Retailers must conduct thorough market research to understand local trends, shopping habits, and preferences.

• Global Trend Impact:

Some consumer trends, such as sustainability and ethical consumption, have global resonance. Retailers can leverage such trends for consistent messaging across international markets.

8. Social and Environmental Responsibility:

• CSR and Sustainability:

Social and environmental responsibility are increasingly important globally. Retailers are expected to demonstrate commitment to sustainable and ethical practices, aligning with global expectations.

9. Logistics and Distribution:

• Efficient Distribution Networks:

Establishing efficient logistics and distribution networks is critical for timely and cost-effective delivery of products. Retailers often optimize distribution strategies based on the geography and infrastructure of each market.

• Last-Mile Challenges:

Last-mile delivery challenges can vary significantly, and retailers must address them to provide a seamless customer experience.

10. Adaptability and Agility:

• Agile Business Models:

International retailers need to adopt agile business models to respond to changing market conditions, consumer preferences, and competitive landscapes.

• Crisis Management:

Effective crisis management is essential for navigating unexpected challenges, such as geopolitical events, economic downturns, or public health crises.

Retail theories encompass a wide range of concepts and models that help explain the dynamics, strategies, and challenges within the retail industry. These theories are developed to provide insights into consumer behavior, market trends, and effective retail management.

Retail theories provide valuable frameworks for understanding and navigating the complex dynamics of the retail industry. From consumer behavior and store location to marketing strategies and the impact of technology, these theories guide retailers in making informed decisions and staying competitive in an ever-evolving marketplace. The retail landscape continues to transform, and the application of these theories allows retailers to adapt, innovate, and meet the evolving needs of consumers.

This session deals with the following theories namely:

• Wheel of Retailing
• Retail Accordian Theory
• Theory of Natural Selection
• Retail life cycle

1. Wheel of Retailing

This theory talks about the structural changes in retailing. The theory was proposed by Malcomb McNair and according to this theory it describes how retail institutions change during their life cycle. In the first stage when new retail institutions start business they enter as low status, low price and low margin operations. As the retail firms achieve success they look in for increasing their customer base.

They begin to upgrade their stores, add merchandise and new services are introduced. Prices are increased and margins are raised to support the higher costs. New retailers enter the market place to fill the vacuum, while this continues to move ahead as a result of the success. A new format emerges when the store reaches the final stage of the life cycle. When the retail store started it started low but when markets grew their margins and price changed. The theory has been criticized because they do not advocate all the changes that happen in the retail sector and in the present scenario not all firms start low to enter the market

2. Retail Accordian Theory

This theory describes how general stores move to specialized stores and then again become more of a general store. Hollander borrowed the analogy ‘accordian’ from the orchestra. He suggested that players either have open accordion representing the general stores or closed accordions representing narrow range of products focusing on specialized products. This theory was also known as the general-specific-general theory. The wheel of retailing and the accordion theory are known as the cyclical theories of retail revolution

3. Theory of Natural selection

According to this theory retail stores evolve to meet change in the microenvironment. The retailers that successfully adapt to the technological, economic, demographic and political and legal changes are the ones who are more likely to grow and prosper. This theory is considered as a better one to wheel of retailing because it talks about the macro environmental variables as well, but the drawback of this theory is that if fails to address the issues of customer taste, expectations and desires

4. Retail Life cycle

Like products, brands retail organizations pass through identifiable stages of innovation, accelerated development, maturity and decline. This is commonly known as the retail life cycle. Any organization when in the innovation stage is nascent and has few competitors. They try to create a distinctive advantage to the final customers. Since the concepts are new at this stage organizations try to grow rapidly and the management tries to experiment. Profits will be moderate and the stage may last for a couple of years. When we talk about our country e-buying or online shopping is in the innovation stage.

In the accelerated growth phase the organizations face rapid increase in sales, competitors begin to emerge and the organizations begin to use leadership and their presence as a tool in stabilizing their position. The investment level will be high as there are others who will be creating a lot of competition. This level may go up to eight years. Hypermarkets, Dollar stores are in this stage. In the maturity stage as competition intensifies newer forms of retailing begin to emerge, the growth rate starts to decline. At this stage firms should start work on strategies and reposition techniques to be in the market place. Supermarkets, cooperative stores are in this stage. In the final stage of the retail life cycle is the declining phase where firms begin to loose their competitive advantage. Profitability starts to decline further and the overheads starts to rise. Thus we see that organizations needs to adopt different strategies at each level in order to sustain in the marketplace.

1. Consumer Behavior Theories:

• Wheel of Retailing:

The Wheel of Retailing theory, proposed by Malcolm P. McNair in the 1950s, suggests that retail firms evolve through predictable stages. Retailers initially enter the market with low-status, low-margin operations and gradually add services and amenities as they succeed. Over time, this process may lead to higher prices and increased competition, eventually prompting the entry of new low-status retailers. The cycle continues.

• Retail Life Cycle:

Building on the Wheel of Retailing, the Retail Life Cycle theory posits that retail formats go through distinct life stages, including introduction, growth, maturity, and decline. Each stage is associated with specific challenges and opportunities. Understanding the life cycle helps retailers adapt strategies based on their position in the market.

• Customer Decision-Making Process:

The Consumer Decision-Making Process theory outlines the steps consumers go through when making purchasing decisions. These steps include problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation. Retailers use this theory to tailor marketing strategies to influence consumers at each stage.

2. Store Location Theories:

• Central Place Theory:

The Central Place Theory, developed by Walter Christaller, explores the optimal spatial arrangement of retail centers within a geographic area. It posits that consumers will travel to the nearest central place (retail center) to fulfill their shopping needs. Larger retail centers offering a broader range of goods and services are located less frequently but serve a larger population.

• Huff’s Gravity Model:

The Huff’s Gravity Model predicts the probability of a consumer choosing a particular store based on its attractiveness (size, offerings) and distance. This model is valuable for retailers in understanding consumer behavior related to store choice and optimizing their location strategies.

3. Retail Marketing Theories:

• Retail Mix:

The Retail Mix theory, also known as the 6 Ps of retailing (Product, Price, Place, Promotion, Presentation, and Personnel), emphasizes the interconnected elements that retailers must consider when creating a marketing strategy. Balancing these elements is essential for a cohesive and effective retail marketing approach.

• STP Marketing:

STP stands for Segmentation, Targeting, and Positioning. In retail, this theory involves identifying market segments, selecting target segments that align with the retailer’s strengths, and positioning the store to meet the specific needs and preferences of those target customers.

• Retail Atmospherics:

Retail Atmospherics theory explores how the physical environment of a store, including lighting, colors, scents, and layout, affects consumer perceptions and behavior. Creating a pleasant and engaging atmosphere enhances the overall shopping experience and influences purchasing decisions.

4. Retail Evolution Theories:

• Wheel of Retailing Evolution:

The Wheel of Retailing Evolution theory builds on the Wheel of Retailing, proposing that retailers evolve through stages of innovation, growth, maturity, and decline. New retailers often introduce innovative formats, challenging existing structures and leading to a continuous cycle of evolution in the retail industry.

• Retail Life Cycle Evolution:

Similar to the Retail Life Cycle, this theory suggests that retail formats evolve through stages of introduction, growth, maturity, and decline. The evolution may involve changes in format, strategies, and consumer offerings to adapt to market conditions and competition.

5. Technology and Omnichannel Retailing Theories:

• Technology Adoption Curve:

The Technology Adoption Curve, developed by Everett Rogers, categorizes consumers into innovators, early adopters, early majority, late majority, and laggards based on their readiness to adopt new technologies. Retailers use this theory to guide their adoption of technology and innovation strategies.

• Omnichannel Retailing:

Omnichannel Retailing theory emphasizes the integration of various channels (online, offline, mobile, etc.) to provide a seamless and unified shopping experience for consumers. It recognizes that consumers may engage with retailers through multiple channels and aims to create a cohesive brand experience across all touchpoints.

6. Retail Strategy Theories:

• Porter’s Generic Strategies:

Developed by Michael Porter, this theory outlines three generic strategies for competitive advantage: cost leadership, differentiation, and focus. Retailers can pursue one of these strategies to position themselves in the market and gain a competitive edge.

• Wheel of Retailing Strategy:

The Wheel of Retailing Strategy theory suggests that retailers should strategically choose their positioning within the Wheel’s evolution stages. For example, a retailer may opt for a low-cost strategy as a low-status entrant or differentiate through innovation as a higher-status player.

7. Sustainability in Retailing:

• Green Retailing:

With a growing emphasis on sustainability, Green Retailing theory focuses on environmentally friendly retail practices. This includes sustainable sourcing, energy-efficient operations, waste reduction, and efforts to appeal to environmentally conscious consumers.

• Circular Economy in Retailing:

The Circular Economy theory promotes a regenerative approach where products, materials, and resources are kept in use for as long as possible. Retailers adopting circular economy principles aim to reduce waste, recycle materials, and create more sustainable product life cycles.

In India the banks and banking have been divided in different groups. Each group has their own benefits and limitations in their operations. They have their own dedicated target market. Some are concentrated their work in rural sector while others in both rural as well as urban. Most of them are only catering in cities and major towns.

Indian Banking System: Structure

Bank is an institution that accepts deposits of money from the public.

Anybody who has account in the bank can withdraw money. Bank also lends money.

Indigenous Banking

The exact date of existence of indigenous bank is not known. But, it is certain that the old banking system has been functioning for centuries. Some people trace the presence of indigenous banks to the Vedic times of 2000-1400 BC. It has admirably fulfilled the needs of the country in the past.

However, with the coming of the British, its decline started. Despite the fast growth of modern commercial banks, however, the indigenous banks continue to hold a prominent position in the Indian money market even in the present times. It includes shroffs, seths, mahajans, chettis, etc. The indigenous bankers lend money; act as money changers and finance internal trade of India by means of hundis or internal bills of exchange.

Disvantages

(i) They are unorganized and do not have any contact with other sections of the banking world.

(ii) They combine banking with trading and commission business and thus have introduced trade risks into their banking business.

(iii) They do not distinguish between short term and long term finance and also between the purpose of finance.

(iv) They follow vernacular methods of keeping accounts. They do not give receipts in most cases and interest which they charge is out of proportion to the rate of interest charged by other banking institutions in the country.

Suggestions for Improvements

(i) The banking practices need to be upgraded.

(ii) Encouraging them to avail of certain facilities from the banking system, including the RBI.

(iii) These banks should be linked with commercial banks on the basis of certain understanding in the respect of interest charged from the borrowers, the verification of the same by the commercial banks and the passing of the concessions to the priority sectors etc.

(iv) These banks should be encouraged to become corporate bodies rather than continuing as family based enterprises.

Structure of Organized Indian Banking System

The organized banking system in India can be classified as given below:

Reserve Bank of India (RBI)

The country had no central bank prior to the establishment of the RBI. The RBI is the supreme monetary and banking authority in the country and controls the banking system in India. It is called the Reserve Bank’ as it keeps the reserves of all commercial banks.

Commercial Banks

Commercial banks mobilise savings of general public and make them available to large and small industrial and trading units mainly for working capital requirements.

Commercial banks in India are largely Indian-public sector and private sector with a few foreign banks. The public sector banks account for more than 92 percent of the entire banking business in India—occupying a dominant position in the commercial banking. The State Bank of India and its 7 associate banks along with another 19 banks are the public sector banks.

Scheduled and Non-Scheduled Banks

The scheduled banks are those which are enshrined in the second schedule of the RBI Act, 1934. These banks have a paid-up capital and reserves of an aggregate value of not less than Rs. 5 lakhs, hey have to satisfy the RBI that their affairs are carried out in the interest of their depositors.

All commercial banks (Indian and foreign), regional rural banks, and state cooperative banks are scheduled banks. Non- scheduled banks are those which are not included in the second schedule of the RBI Act, 1934. At present these are only three such banks in the country.

Regional Rural Banks

The Regional Rural Banks (RRBs) the newest form of banks, came into existence in the middle of 1970s (sponsored by individual nationalized commercial banks) with the objective of developing rural economy by providing credit and deposit facilities for agriculture and other productive activities of al kinds in rural areas.

The emphasis is on providing such facilities to small and marginal farmers, agricultural labourers, rural artisans and other small entrepreneurs in rural areas.

Other special features of these banks are

(i) Their area of operation is limited to a specified region, comprising one or more districts in any state.

(ii) Their lending rates cannot be higher than the prevailing lending rates of cooperative credit societies in any particular state.

(iii) The paid-up capital of each rural bank is Rs. 25 lakh, 50 percent of which has been contributed by the Central Government, 15 percent by State Government and 35 percent by sponsoring public sector commercial banks which are also responsible for actual setting up of the RRBs.

These banks are helped by higher-level agencies: the sponsoring banks lend them funds and advise and train their senior staff, the NABARD (National Bank for Agriculture and Rural Development) gives them short-term and medium, term loans: the RBI has kept CRR (Cash Reserve Requirements) of them at 3% and SLR (Statutory Liquidity Requirement) at 25% of their total net liabilities, whereas for other commercial banks the required minimum ratios have been varied over time.

Cooperative Banks

Cooperative banks are so-called because they are organized under the provisions of the Cooperative Credit Societies Act of the states. The major beneficiary of the Cooperative Banking is the agricultural sector in particular and the rural sector in general.

The cooperative credit institutions operating in the country are mainly of two kinds: agricultural (dominant) and non-agricultural. There are two separate cooperative agencies for the provision of agricultural credit: one for short and medium-term credit, and the other for long-term credit. The former has three tier and federal structure.

At the apex is the State Co-operative Bank (SCB) (cooperation being a state subject in India), at the intermediate (district) level are the Central Cooperative Banks (CCBs) and at the village level are Primary Agricultural Credit Societies (PACs).

Long-term agriculture credit is provided by the Land Development Banks. The funds of the RBI meant for the agriculture sector actually pass through SCBs and CCBs. Originally based in rural sector, the cooperative credit movement has now spread to urban areas also and there are many urban cooperative banks coming under SCBs.

Security is what the borrower puts up to guarantee payment of the loan. Moreover security means immovable & chattel or personal asset or assets to which a lender can have recourse if the borrower defaults in the loan payment. Bankers, whenever advancing loans, first ask for the security to be put for the loans requested. Different types of securities are used depending upon the nature of the advances issued by the banks. A good security must be enough to cover the risk, highly liquid, free from any encumbrance, clean in ownership and easy to handle.

There are two types of banks security.

• Personal Security
• Non-personal security

1. Personal security

If any banks client himself or third party is considered as security is called personal security. without receiving the immovable & chattel assets as security, if bank can receive any client himself or any person own self on be half of that client as security is considered as personal security. Bank will consider the person or third party only for then when he has enough social dignity and goodwill or a scope of applying law against himself in future or he is engaged in renowned business, government or recognized non government organization.

2. Non-personal security

without receiving any client himself or any person own self on be half of that client as security , if bank can receive the immovable & chattel assets as security is considered as non-personal security. There are four types of non-personal security. such as-

• Lien
• Pledge
• Mortgage
• Hypothecation

The above four categories of non-personal security are given below with detail.

(a) Lien

The right of retain foods is known as lien. The lawful right of a lender to offer the guarantee property of an account holder who neglects to meet the commitments of an advance contract. A lien exists, for instance, when an individual takes out a vehicles advance. The lien holder is the bank that allows the advance, and the lien is discharged when the credit is forked over the required funds. Another kind of lien is a repairman’s lien, which can be appended to genuine property if the property proprietor neglects to pay a foreman for administrations rendered. In the event that the account holder never pays, the property can be sold to pay the lien holder. There are two types of lien:-

• General lien: Here, Bank has the possess of the assets have been kept as security and bank can’t transfer the possession to another until the loan amount is being paid.
• Special lien: Here, Bank has the possess of the assets have been kept as security and bank can transfer the possession to another on conditions is called special lien.

(b) Pledge

Here the possess of assets is to bank or loan provider, but the ownership is to borrower. After payment, bank transfers the possession of security assets to borrower. When a customer takes loan against jewels he pledges the jewel to the bank.  Similarly a customer availing loan on key cash credit basis pledges the  goods to the banker by keeping them in a godown under lock and key  control of the bank. Pledged goods are to be insured and the pledgee (banker) has to take reasonable care to protect the property pledged.

3. Mortgage

It is an interest in property created as security for a loan or payment of debt and terminated on payment of the loan or debt. A mortgage is a contract that permits a loan provider partially or fully to foreclose that security when a borrower is unable to pay the loan amount. Mortgage is applicable only for immovable assets and this is why it is called immovable property mortgage. There are many types of mortgage have been described below.

• Simple mortgage: If the loan amount isn’t paid by borrower and legal step is taken against him or lender can purchase which security assets on the opinion of borrower is called simple mortgage.
• Fixed mortgage: The borrower gives which property in black & white or in registering to the lender and if the loan is not paid in time, then legal possession of that security is gained by lender is called fixed mortgage.
• Conditional mortgage: If the loan amount isn’t paid in time and without fulfilling the determined conditions, the which security is not sold or transfered is called conditional mortgage.
• Floating mortgage: The possession right of which mortgage properly is belonged to borrower and only documents are submitted to loan provider is called floating mortgage.
• Equitable mortgage: The documents of which mortgage property is kept to bank for a specific time period and possession is belonged to borrower and after exceeding the payment period bank try to gain the legal possession is called equitable mortgage.
• Registered equitable mortgage: The ownership documents of which mortgage property is kept to lone provider with registration for a specific time period and possession is belonged to borrower is called registered equitable mortgage.
• Use fructuary mortgage: The possession & consumption of which mortgage property is given to loan provider as loan providing till a specific time period and after exceeding that time period the belongingness of that property is leaved to borrower is called use fructuary mortgage.
• English mortgage: The ownership of which mortgage property is to loan provider and possession or belongingness of that property is to borrower is called English mortgage. If borrower is fail to pay the loan amount then the possession power is automatically gone to loan provider.

4. Hypothecation

It is pledge to secure an obligation without delivery of title or possession.

At last we can say that, at the modern banking sectors a great changes has been occurred in the categories of categories of mortgage.