UNION BANK OF INDIA

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• UNION BANK OF INDIA
• WELCOMES
• ALL THE PARTICIPANTS

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ESCROW ACCOUNT

• Escrow account is a third party arrangement to
  ensure performance of certain obligations between
  certain parties and operated in terms of an
  underlying agreement.

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ESCROW ACCOUNT

• Will be a current account without cheque drawing
  facility
• or
• SB A/C / Fixed Deposit Account , as defined in
  terms of agreement.

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ESCROW can be defined as

• Exclusive   
• Security
• Coverage to the
• Representative Parties
• Operations as per agreement
• Without prejudice(Trust basis)
• Cont.

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Compartments of ESCROW Account

• Debt Account-Depositing funds received through
  debts raised by the developer by creating liens
  on the Assets to be created ,will be known as
  Debt Account.
• Revenue Account-Depositing revenue from
  marketing of the Project Assets.

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• Parties of ESCROW Arrangement
• Developer
• b) Lenders Representatives
• c) Escrow agent (Bank)
• d) RLDA

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Escrow Mechanism

• The primary aim of an Escrow Account is to
  safeguard the borrower against its customers from
  the payment risk for the goods or services sold
  by the former to the latter.
• To remove the control over the cash flows from
  the hands of the customer to an independent
  agent,who in turn could ensure appropriation of
  cash flows as per its mandate.
• To direct a pre-determined payment stream from
  the customers of the borrower to a special
  account maintained with designated agent.Payment
  deposit by the user/buyer into such account is
  assumed to be valid discharge of his liability to
  the supplier of the goods/services.

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RLDA
DEVELOPER
Inflow
Inflow
BANK ( ESCROW A/C )
Outflow
Outflow
DEVELOPER
RLDA
GOVT.
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Benefits of Escrow Accounts

• Provides greater security comfort.
• Trapping of identified cash flows.
• Regulatory requirements.
• Custody of cash documents.
• Ease of monitoring
• Less expensive rather more profitable in
  comparison to BG etc.

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Coming together is beginning Being together is a
process Working together is success LET US WORK
TOGETHER TO GREATER HEIGHTS Thank you