What is a pledge deposit?

Margin pledge means that the borrower deposits money into a special account opened in the bank and promises to use the money in the account as a guarantee to repay the loan. When the borrower fails to perform the debt, the lending bank has the right to directly deduct the deposit from the special deposit account for repayment of the loan.

legal ground

Article 388 of the Civil Code

To establish a security interest, a security contract shall be concluded in accordance with the provisions of this Law and other laws. Guarantee contracts include mortgage contracts, pledge contracts and other contracts with guarantee functions. The guarantee contract is a subsidiary contract of the main creditor's rights and debts contract. If the principal creditor's rights and debts contract is invalid, the guarantee contract is invalid, unless otherwise stipulated by law.

If the debtor, guarantor and creditor are at fault after the guaranty contract is confirmed to be invalid, they shall bear corresponding civil liabilities according to their faults.