Article 36 of the Saudi Commercial Pledge Law
المادة 36 من نظام الرهن التجاري · الفصل التاسع: أحكام خاصة برهن بعض الأموال
The article lets the financial institution deduct from the account its obligations that fell due and predate the pledge, and bars the pledgor from withdrawing or transferring from the pledged account unless otherwise agreed.
Official text after amendments (Arabic)
Compiled from the original text and every officially published amendment; the amendments are shown in full below for comparison.
2- يجوز للمنشأة المالية خصم الالتزامات المالية المدينة الناشئة قبل انعقاد الرهن على الحساب، وذلك عند حلول أجلها.
3- لا يحق للراهن السحب من الحساب المرهون والتحويل منه ما لم يتفق على غير ذلك، ولا يحق له كذلك السحب أو التحويل في حال تم فتح الحساب باسم السجل في الأحوال المنصوص عليها في النظام.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 36 explained in plain English
This article concerns the pledge of accounts. Paragraphs (1) and (4) were deleted by Royal Decree No. M/94 dated 15/8/1441 AH, so its text in force consists of two paragraphs:
Paragraph (2): the financial institution's right to deduct. The financial institution may deduct from the account debit financial obligations that arose before the pledge was made, when they fall due. So the pledge does not prevent it from recovering obligations that predate the pledge once they fall due.
Paragraph (3): barring the pledgor from withdrawing and transferring.
- The pledgor may not withdraw from the pledged account or transfer from it, unless otherwise agreed.
- Nor may it withdraw or transfer if the account was opened in the name of the register in the cases provided for in the law.
The pledgor, under Article 1, is the one who provides the pledge, whether the debtor itself or a guarantor who pledges an asset for it, and the pledged asset is the movable asset provided as security for a debt. The text in force does not state the cases in which the account is opened in the name of the register, as it refers on that to what the law provides.
To assess the effect of pledging a particular account or the terms of agreeing to it, it is advisable to consult a lawyer specialized in banking and finance.
Practical example
An establishment in Riyadh pledged its account with a bank to secure financing it obtained. The establishment may not withdraw from the account or transfer from it unless the pledge contract agreed otherwise. And if the establishment has a financial obligation to the bank that arose before the pledge and has fallen due, the bank may deduct it from the account.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 36 of the Saudi Commercial Pledge Law
Can the pledgor withdraw from the pledged account?
It may not withdraw or transfer from the pledged account unless otherwise agreed.
Can the bank deduct from the pledged account?
The financial institution may deduct debit financial obligations that arose before the pledge was made, when they fall due.
What if the account was opened in the name of the register?
The pledgor may not withdraw or transfer from it in the cases provided for in the law.
Amendment history
Royal Decree No. M/94 — 15/8/1441 AH
Official amendment text (Arabic)
- حُذفت الفقرتين (1) و (4) من هذه المادة، وذلك بموجب المرسوم الملكي رقم (م/94) وتاريخ 15/8/1441هـ.
Original text before the amendments (Arabic)
1- ترهن الحسابات الجارية والحسابات الاستثمارية والودائع لأجل بقيد عقد الرهن في السجل أو بقيد عقد الرهن في السجلات الخاصة بذلك وفقًا للمادة (التاسعة والثلاثين) من النظام، ويشمل الرهن رصيد الحساب بتاريخ القيد وما يضاف إليه من إيداعات لاحقة، ما لم يتفق على غير ذلك.
2- يجوز للمنشأة المالية خصم الالتزامات المالية المدينة الناشئة قبل انعقاد الرهن على الحساب، وذلك عند حلول أجلها.
3- لا يحق للراهن السحب من الحساب المرهون والتحويل منه ما لم يتفق على غير ذلك، ولا يحق له كذلك السحب أو التحويل في حال تم فتح الحساب باسم السجل في الأحوال المنصوص عليها في النظام.
4- مع مراعاة ما جاء في الفقرة (1) من هذه المادة، تحدد اللائحة الإجراءات المتعلقة بالرهن على الحسابات الجارية والحسابات الاستثمارية والودائع لأجل بالتنسيق مع هيئة السوق المالية ومؤسسة النقد العربي السعودي كل فيما يخصه.
More articles on Pledge of Accounts and Securities
- Article 38Amended (1411 AH)
The article permits pledging all of the pledgor's movable assets, a part or class of them, or an adequately described asset, and states when enforcement may take place and the pledgor's right to dispose of the assets before default.
1- يجوز رهن جميع الأموال المنقولة المملوكة للراهن أو جزء منها أو فئة منها، ويجوز كذلك رهن أي مال منقول موصوف وصفً عاماً وكافياً لتعيينه 2- يكون التنفيذ على الره
- Article 39Amended by M/94
The article subjects the pledge of ships, aircraft, commercial and financial papers, shares, deposited goods and trademarks to their own special laws, with the Commercial Pledge Law applying where they are silent.
1- يخضع رهن السفن، والطائرات، والأوراق التجارية، والأوراق المالية المتداولة في السوق المالية، وأسهم الشركات غير المتداولة في السوق المالية، والبضائع المودعة في
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.