At Food Bazaar yesterday, there was a notice that said “Stocks Hypothecated to:”  followed by a list of banks that the stocks were hypothecated to. I know that many retailers are in trouble because of falling demand and difficulties in finance, and I can understand hypothecating your stocks to get working capital finance. But why announce that fact to your customers? What possible relevance can it have to a customer who has shown up with cash to buy toor dal to learn that the toor dal is in fact hypothecated to State Bank of India?  Obviously, once he buys the toor dal, it is his. SBI will not raid his kitchen to recover money from Big Bazaar.  It looks like some legal requirement or some requirement imposed by the creditors, but I don’t see why it makes sense to the creditors either. If at all the notice has an effect, it will make the customer unnecessarily panic, driving him away and making it less likely that Big Bazaar will make enough money to return its loan. So why put up those notices? Any ideas?