Account Control Agreement Template for India

An Account Control Agreement is utilized in secured lending transactions where deposit accounts serve as collateral security. This document becomes necessary when a lender requires control over the borrower's bank accounts as part of its security package. The agreement, governed by Indian law, establishes the mechanism through which the secured party can exercise control over the specified accounts, while defining the roles and responsibilities of all parties involved. It includes detailed provisions regarding account operation, control rights, instruction protocols, and the depositary bank's obligations. The document must comply with Indian banking regulations, particularly the Banking Regulation Act, 1949, and the SARFAESI Act, 2002, while also adhering to general principles under the Indian Contract Act, 1872.

1. Parties: Identifies and provides details of the Account Holder, Secured Party, and Depositary Bank

2. Background: Explains the context of the agreement, including reference to any related security agreements or credit facilities

3. Definitions: Defines key terms used throughout the agreement

4. Establishment of Account Control: Core section establishing secured party's control over the deposit account

5. Rights and Duties of Depositary Bank: Outlines the bank's obligations regarding account maintenance and control instructions

6. Account Operations: Details day-to-day operation of the account, including processing of instructions and authorizations

7. Security Interest and Control: Specifics of the security interest and control mechanisms

8. Instructions and Notices: Procedures for giving and acting on instructions regarding the account

9. Representations and Warranties: Standard representations and warranties from all parties

10. Fees and Expenses: Details of fees payable to the depositary bank and allocation of expenses

11. Indemnification: Indemnification obligations of the parties

12. Term and Termination: Duration of the agreement and termination provisions

13. Governing Law and Jurisdiction: Specifies Indian law as governing law and jurisdiction for disputes

14. Miscellaneous: Standard boilerplate provisions including amendments, notices, severability