Account Pledge Agreement Template for Indonesia

An Account Pledge Agreement is a security document that allows you to pledge bank accounts as collateral for loans or other financial obligations under Indonesian law. This agreement creates a legally binding security interest over specified accounts, giving lenders the right to control and potentially seize account funds if you default on your obligations. The document must comply with Indonesian Civil Code provisions, banking regulations, and fiducia security laws to ensure enforceability.

When do you need this document?

You need an Account Pledge Agreement when securing corporate loans, project financing, or structured finance transactions where lenders require control over your cash flows. Banks and financial institutions commonly require this security when providing working capital facilities, construction loans, or syndicated lending arrangements. The agreement is particularly crucial in infrastructure projects, manufacturing facilities, and large commercial transactions where predictable cash flows serve as primary repayment sources. You'll also need this document when refinancing existing facilities or when lenders demand additional security over liquid assets to reduce their credit risk.

Key legal considerations

The agreement must clearly identify all pledged accounts, including account numbers, banks, and currencies involved. You must ensure proper notification procedures to account banks and obtain their acknowledgment of the pledge to perfect the security interest. The document should specify enforcement triggers, such as payment defaults or covenant breaches, and outline the pledgee's rights to freeze or sweep accounts. Critical provisions include permitted account operations during normal business, restrictions on account closures or transfers, and priority arrangements with other creditors. You must also address Indonesian regulatory requirements for cross-border accounts and foreign currency restrictions that may affect enforcement rights.

Legal requirements in Indonesia

Indonesian law requires Account Pledge Agreements to comply with Civil Code Articles 1150-1160 governing pledge arrangements and Law No. 42 of 1999 on Fiducia Security for movable asset security interests. The agreement must be properly notarized by an Indonesian notary and registered with the Fiducia Registration Office to ensure enforceability against third parties. Bank Indonesia Regulation No. 3/10/PBI/2001 governs know-your-customer requirements that affect account operations under security arrangements. The document must specify jurisdiction for dispute resolution, typically Indonesian courts, and ensure compliance with Law No. 10 of 1998 on Banking regarding account operations and bank cooperation with security holders. Proper documentation and registration are essential for priority ranking under Law No. 37 of 2004 on Bankruptcy and Suspension of Payment.