Research On Legal Problems Of Taking Security Over Bank Account

Taking security over bank account is a new type of security that is widely used in practice due to the financial demands of the enterprise.However,its legal nature is unclear yet under the Property Law of China and such has been a hotly debated issue.Taking security over bank account means that the security provider grants security to the creditor in connection with its own bank account,and in the event that the debtor cannot perform its obligation under the underlying finance agreement,the creditor may satisfy its granted interests over the account.The main function of taking security over bank account is to serve as an important means for financing for enterprises doing import and export business.As the origin of the bank account security,the United Kingdom by its laws treats taking security over bank account as a form of security over future claims.In terms of the essence of taking security over bank account,American law is similar to the British charge,but it differs in a way that it does not recognize the floating charge.Under German law,when a security right is created over a bank account,the security object is not the deposit itself but the bank account representing a debt owed by the account bank.Considering the legal system of China in relation to the bank account security and its value of existence,taking security over bank account should be recognized as a pledge over rights,and the argument that security over bank account is a pledge over money has so many shortcomings that is should be abandoned.Through the analysis of those cases relevant to taking security over bank account in practice,this paper detects that many judgments are contradictory to each other due to the ambiguity of the legislation.It thus provides suggestion to the publicity problem of the pledge over bank account,and the control issues related to the bank account as a pledged asset.