Bank Account Pledge Agreement Template for Nigeria

The Bank Account Pledge Agreement is a crucial security document used in Nigerian financial transactions where a bank account serves as collateral for financial obligations. It is commonly employed in corporate lending, project finance, and other secured financing arrangements where lenders require control over a borrower's cash flows or specific accounts. The agreement must comply with Nigerian banking regulations, particularly BOFIA 2020 and secured transactions laws, and typically includes detailed provisions on account operation, enforcement rights, and security perfection requirements. This document is essential when structuring security packages in Nigerian finance transactions and must be carefully drafted to ensure enforceability and alignment with local banking practices and regulatory requirements.

1. Parties: Identification of the Pledgor and the Pledgee (Bank/Security Agent)

2. Background: Context of the pledge agreement, reference to any underlying facility or main agreements

3. Definitions and Interpretation: Key terms used in the agreement, including 'Pledged Account', 'Secured Obligations', 'Security Period'

4. Creation of Pledge: Legal establishment of the security interest over the bank account

5. Scope of Security: Details of what is covered by the pledge (account balance, interest, proceeds)

6. Perfection Requirements: Steps required to perfect the security interest under Nigerian law

7. Representations and Warranties: Standard declarations by the Pledgor regarding authority, ownership, and absence of encumbrances

8. Pledgor's Obligations: Ongoing duties of the Pledgor regarding the pledged account

9. Rights and Obligations of the Pledgee: Powers and responsibilities of the security holder

10. Events of Default: Circumstances triggering enforcement rights

11. Enforcement: Mechanisms for enforcing the security interest following default

12. Power of Attorney: Authorization for the Pledgee to act on Pledgor's behalf when permitted

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of Nigerian law application and courts' jurisdiction

15. Miscellaneous: Standard boilerplate provisions including severability, amendments, waivers