Deposit Control Agreement for India

Deposit Control Agreement Template for India

A Deposit Control Agreement under Indian law is a tripartite agreement that establishes control over a deposit account maintained by a depositor with a deposit bank in favor of a control bank or security agent. The agreement is governed by Indian law, particularly the Banking Regulation Act, 1949, and the Indian Contract Act, 1872. It sets out the mechanisms for controlling the deposit account, including operational procedures, rights of the parties, and default scenarios. The document ensures compliance with Indian banking regulations while providing security over deposit accounts in financing transactions.

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What is a Deposit Control Agreement?

The Deposit Control Agreement is a crucial security document used in Indian financing transactions where control over bank accounts is required as part of a security package. This agreement is typically executed when a lender requires control over a borrower's deposit accounts as security for financial obligations. The document establishes the rights and procedures for controlling deposit accounts, ensuring that the security agent can exercise control over the account under specified circumstances. Under Indian law, particularly the Banking Regulation Act and Contract Act, this agreement creates a valid security interest over deposit accounts while maintaining operational flexibility for the depositor during normal business operations. The agreement is commonly used in project financing, corporate lending, and structured finance transactions where account control mechanisms are essential for security purposes.

What sections should be included in a Deposit Control Agreement?

1. Parties: Identifies and defines all parties to the agreement: the Depositor, the Deposit Bank, and the Control Bank/Beneficiary

2. Background: Explains the context and purpose of the agreement, including reference to any related agreements

3. Definitions: Defines key terms used throughout the agreement

4. Establishment of Deposit Account: Details of the deposit account setup, account number, and initial deposit requirements

5. Control Rights: Specifies the control rights over the deposit account, including operational control and signing authorities

6. Operating Procedures: Detailed procedures for account operations, transfers, and instructions

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

8. Rights and Obligations: Specific rights and obligations of each party under the agreement

9. Events of Default: Defines events that constitute default and their consequences

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

11. Notices: Process and requirements for serving notices under the agreement

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

13. Miscellaneous: Standard boilerplate provisions including amendments, assignments, and severability

What sections are optional to include in a Deposit Control Agreement?

1. Electronic Instructions: Additional provisions for electronic communications and instructions, used when parties agree to electronic operation of the account

2. Multiple Accounts: Additional provisions for when multiple deposit accounts are covered under the agreement

3. Foreign Currency Provisions: Specific provisions for handling foreign currency deposits, used when foreign currency accounts are involved

4. Interest and Fees: Detailed provisions about interest calculations and bank fees, used when specific interest arrangements are needed

5. Security Interest: Additional provisions creating security interest over the deposit, used when required by the control bank

6. Force Majeure: Provisions dealing with unforeseen circumstances, used in jurisdictions where this is commonly included

7. Regulatory Compliance: Additional compliance requirements, used when specific regulatory obligations need to be addressed

What schedules should be included in a Deposit Control Agreement?

1. Schedule 1 - Account Details: Specific details of the deposit account(s) including account numbers and branch details

2. Schedule 2 - Authorized Signatories: List of authorized signatories and their specimen signatures

3. Schedule 3 - Operating Procedures: Detailed operational procedures and requirements for account operation

4. Schedule 4 - Fee Schedule: Details of all applicable fees and charges

5. Appendix A - Notice Forms: Standard forms for various notices under the agreement

6. Appendix B - Instruction Forms: Standard forms for giving instructions regarding the deposit account

7. Appendix C - KYC Documents: List of required Know Your Customer documents for each party

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Corporate Finance

Infrastructure

Real Estate

Manufacturing

Energy

Telecommunications

Healthcare

Information Technology

Relevant Teams

Legal

Finance

Treasury

Compliance

Banking Operations

Credit Risk

Corporate Finance

Transaction Management

Security and Collateral Management

Relevant Roles

Legal Counsel

Finance Manager

Treasury Manager

Chief Financial Officer

Banking Relationship Manager

Security Trustee

Compliance Officer

Account Manager

Credit Risk Manager

Transaction Manager

Corporate Finance Director

Senior Legal Advisor

Banking Operations Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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