Retention of title

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

A retention of title clause — a Romalpa clause, in the older name — lets a supplier keep ownership of goods it has delivered until it is paid for them. For a lender it means some of the stock in a borrower's warehouse may not be the borrower's to give as security: a supplier whose interest is properly protected can recover its goods or their proceeds ahead of the bank. A desk lending against inventory asks which suppliers sell on these terms and discounts the stock for it; in New Zealand and Australia it also searches the PPSR, where a supplier must register the interest for it to hold.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.