Research On Legal Issues Of Deposit Pledge

Deposit pledge is a form of security in which funds in a specific account are pledged.In recent years,with the increasing demand for individual consumers and small and medium-sized enterprises to obtain credit,deposit pledge has gained the favor of banks and financiers for its convenient establishment,stability of the value of the subject matter of the security and low cost of realizing the security function.However,the legal provisions on deposit pledge in China are not perfect,and there are inconsistencies in the adjudication standards of various court decisions on the elements of validity,effectiveness and publicity of deposit pledge,which also lead to the fact that the security consents of both parties cannot be recognized by the court.Although Article 388 of the Civil Code of the People’s Republic of China(hereinafter referred to as the "Civil Code")stipulates that security contracts include "other contracts with security functions",which to a certain extent alleviates the "legal principle of property rights" and provides a legal basis for the parties to establish an intentional security right,the legal basis for the parties to establish an intentional security right is not limited to the legal basis.Article 70 of the Interpretation of the Supreme People’s Court on the Application of the Civil Code of the People’s Republic of China Concerning the Security System(hereinafter referred to as the "Interpretation of the Security System of the Civil Code")provides for deposit pledge,the purpose of the establishment of deposit pledge,the elements of the validity of deposit pledge and the floating nature of deposit pledge in Article 70 of the section on atypical security.However,how deposit pledge,as an atypical security,can be connected or "integrated" with the typical security in terms of the establishment of rights,publicity of property rights and realization of security functions,and how to give full play to the advantages of deposit pledge,etc.are to be further explained and confirmed.Except for the introduction and conclusion,the whole text is divided into four parts.In the first part,the overview of deposit pledge.Firstly,the definition and characteristics of deposit pledge are introduced to clarify that the definition of deposit pledge studied in this paper is a security method to secure the realization of creditors’ claims with the deposit in a specific bank account.On this basis,the three characteristics of deposit pledge are combined,namely,the pledge of specific money belonging to the kind,the use of bank account as the medium of transferring possession,and the direct deduction of the deposit as the realization of the security function.Secondly,the definition and characteristics of deposit pledge are further clarified by identifying the similar concepts of deposit pledge with account pledge,accounts receivable pledge and certificate of deposit pledge.Finally,the significance of deposit pledge is analyzed from three aspects:facilitating enterprises’ access to credit,optimizing business environment,mitigating bank lending risks,and activating market economy.In the second part,introduce the basic issues of the controversial deposit pledge and present the viewpoint of this paper.Firstly,it briefly introduces various doctrinal views on the legal nature of deposit pledge,and then reviews the various doctrinal views and presents the viewpoint of this paper that deposit pledge is an atypical security.Secondly,it briefly introduces the requirements for the validity of a deposit pledge,including the written agreement of the creditor and the debtor or a third party to pledge the deposit,the specificity of deposit pledge,and the actual control of the creditor over the deposit.Then,we clarify two special issues,namely,the transfer of ownership does not occur after the transfer of possession with the specified currency as the pledge,and the agreement of direct deduction of the security function does not constitute a flow-through clause.Finally,we introduce the main publicity methods and the priority and exclusivity effects of deposit pledge in China to lay the foundation for the following reconstruction of the publicity system of deposit pledge and the exploration of the realization of the security function of deposit pledge.In the third part,we analyze the legislative and judicial status of deposit pledge in China.Firstly,we analyze the current status of the legislation on deposit pledge in China from the provisions of the Civil Code on atypical security and the judicial interpretation on deposit pledge by means of legal analysis.Secondly,we analyze the inconsistency of the courts’ judgment on deposit pledge in China’s judicial practice by means of case studies.Finally,the legal problems of deposit pledge are analyzed in view of the current legislative and judicial situation,and there are mainly five aspects: the unclear validity of the types of deposit pledge not provided for by law;the legislation on deposit pledge,the lack of clarity in the provisions of the elements for the validity of deposit pledge;the deposit pledge public notice and public notice of the weak effect on the world;the failure of creditors to receive priority payment due to the enforcement of the deposit in another case;and the malicious destruction of the specificity of the deposit by bankrupt creditors to prevent the exercise of the pledge’s right to retrieve.In the fourth part,targeted suggestions are made to address the problems existing in the legislation and justice of deposit pledge.The first is to expand the scope of the deposit pledge,in view of the provisions of the exclusive effect of the individual types of deposit pledge scattered in various judicial interpretations,this paper believes that the types that meet the elements of the validity should be included in the scope of the deposit pledge.The second is to refine the provisions of the elements of the validity of the deposit pledge,on the basis of the security agreement,it is necessary to meet the specificity of the deposit and the actual control of the creditor over the deposit before the deposit pledge is effectively established.The third is to reconstruct the publicity system of the deposit pledge,and the effectively established deposit pledge needs to be registered with the People’s Bank of China before it has the effect of the security right,and enhance the publicity effect of the deposit pledge to the world through registration,and serve as the key to the transformation of the debt of the deposit pledge contract which is atypical security to the security right.The fourth is to unify the standards of withholding of deposits by judicial authorities to avoid third parties from destroying the established and registered deposit pledge through enforcement.The fifth is to add a specific provision that the pledge has the right to retrieve the deposit to ensure the pledge’s exclusive right to retrieve the deposit.