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The text discusses collateral debentures, which are issued as additional security when a company seeks a loan. For instance, if XYZ company intends to secure a loan of 50 lakhs from a bank, it may pledge its machinery as collateral. Alongside this, the company might issue debentures worth 60 lakhs to the bank. These debentures serve as collateral security, meaning they provide extra protection for the loan. The bank holds onto the debentures, which can only be utilized if the company defaults on the loan. In summary, the debentures enhance the bank's security without affecting the main asset pledged.