Pledging of Shares

The Reserve Bank of India's Financial Stability Report of December 2014 highlighted that services, media and entertainment, and manufacturing were the top three sectors where promoters have pledged a large portion of their shares with lending institutions. Pledging of shares is considered the easiest way to raise money. Promoters pledge their shares for a variety of reasons: for daily capital needs and operational work, to raise funds for an acquisition, to pay off debt or simply to cash in on the rise in share prices.