What is the Full Form of MOE in Banking?

Thе Full Form of MOE in Banking is Memorandum of Entry. A lender shall execute a MOE to evidence that a borrower has delivered property title deeds with a view to securing a loan. It is used to prove the intention of the borrower to deposit the title deeds with a view to creating a mortgage. It is not a document that in itself creates a mortgage but is a record and thus acts as a safeguard against a lack of clarity on the transaction or other disputes relating to the title documents.

Purposes of MOE

An MOE document serves as official evidence that the title deeds are deposited with the lender, proving beyond any reasonable doubt that the borrower intends to offer the property as security for the loan. In view of avoiding disputes over the deposit and the intentions of the borrower, this written document is very important, as it gives both parties a clear and mutual understanding of the terms of the mortgage. This also protects the lender against lost or stolen title claims, thus safeguarding his interest and the legality of the mortgage agreement.

Legal Significance of MOE in the Creation of Mortgage

Legally, an MOE does not need to establish an equitable mortgage since this can be created through the deposit of title deeds. However, the MOE becomes important since it can be used as proof of the mortgage and terms to which both parties agreed. Under Section 58(f) of the Transfer of Property Act, 1882, a deposit of title deeds of property by a person with a lender to secure financing can be considered prima facie evidence of an agreement between the parties. Courts accept MoE as a useful document that could help in clarifying the terms of a mortgage in case of dispute or documentation is questioned.