The Account Control Agreement is a crucial document in secured financing transactions under Pakistani law, used when a lender requires security over the borrower's bank accounts. This agreement complements other security documents by providing the secured party with control over specified accounts, which is essential for perfecting security interests under Pakistani law. It establishes the operational framework for account management, defines the rights and obligations of all parties, and specifies the circumstances and procedures for the secured party to exercise control. The agreement must comply with the Banking Companies Ordinance 1962, State Bank of Pakistan regulations, and other relevant Pakistani banking and security laws. It is particularly important in project finance, corporate lending, and structured finance transactions where account control is a key element of the security package.
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1. Parties: Identifies the three main parties: Account Holder, Secured Party, and Bank/Financial Institution
2. Background: Explains the context of the agreement, including reference to any underlying security agreement and the purpose of establishing account control
3. Definitions: Defines key terms used throughout the agreement, including Account, Control, Instructions, Security Interest, etc.
4. Account Control and Security Interest: Establishes the secured party's control over the account and confirms the security interest
5. Bank's Rights and Responsibilities: Details the bank's obligations regarding account operation, following instructions, and maintaining the account
6. Control and Instructions: Specifies who can give instructions regarding the account and how such instructions must be given
7. Account Holder's Rights and Restrictions: Outlines what the account holder can and cannot do with respect to the account
8. Secured Party's Rights: Details the secured party's rights to give instructions and exercise control over the account
9. Fees and Expenses: Specifies fees payable to the bank and allocation of expenses
10. Representations and Warranties: Contains standard representations and warranties from each party
11. Indemnification: Sets out indemnification obligations of the parties
12. Term and Termination: Specifies the duration of the agreement and circumstances for termination
13. Notices: Specifies how formal notices must be given between parties
14. Governing Law and Jurisdiction: Specifies Pakistan law as governing law and defines jurisdiction for disputes
15. Miscellaneous: Contains standard boilerplate provisions including amendments, assignments, severability, etc.
1. Electronic Banking Provisions: Required when the account can be accessed through electronic banking systems
2. Foreign Currency Provisions: Needed when the controlled account includes foreign currency holdings
3. Multiple Account Provisions: Required when the agreement covers multiple accounts
4. Sweep Account Arrangements: Needed when the account has automated sweep features
5. Subsidiary Account Holder Provisions: Required when the account holder has subsidiary companies with related accounts
6. Islamic Banking Provisions: Required when the agreement needs to comply with Islamic banking principles
7. Joint Account Holder Provisions: Needed when the account has multiple holders
1. Schedule 1 - Account Details: Lists all accounts covered by the agreement, including account numbers and types
2. Schedule 2 - Authorized Representatives: Lists authorized persons who can give instructions for each party
3. Schedule 3 - Form of Notice of Exclusive Control: Template for secured party to assume exclusive control of the account
4. Schedule 4 - Fee Schedule: Details of bank's fees and charges
5. Schedule 5 - Notice Details: Contact information for all parties for formal notices
6. Appendix A - Operating Procedures: Detailed procedures for account operation, instructions, and control mechanisms
7. Appendix B - Electronic Banking Procedures: Procedures specific to electronic banking access and security measures
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