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A Control Agreement lets a lender maintain control over a borrower's bank accounts or other financial assets in Pakistan. It's a three-way contract between a lender, borrower, and the financial institution holding the assets, typically used in secured lending transactions under the Financial Institutions (Security of Deposits and Accounts) Act, 2016.

Through this agreement, the bank promises to follow the lender's instructions about the pledged accounts, blocking the borrower from freely withdrawing funds or making transfers without approval. This protection gives lenders more confidence in their collateral, making it easier for businesses to access secured financing while ensuring regulatory compliance with State Bank of Pakistan guidelines.

A Control Agreement becomes essential when your business needs secured financing from Pakistani banks or financial institutions. Lenders typically require it for significant loans where accounts or financial assets serve as collateral, especially in trade finance, working capital facilities, or project financing arrangements.

The agreement proves particularly valuable when dealing with multiple banking relationships or complex financial structures. It helps protect lenders under the Financial Institutions Act while giving borrowers access to larger credit facilities. Companies expanding operations, managing large projects, or seeking to optimize their banking arrangements often need these agreements to satisfy both lender requirements and State Bank of Pakistan regulations.

• Basic Account Control Agreement: Covers single bank account control, commonly used for straightforward lending relationships with local Pakistani banks
• Multi-Account Control Agreement: Manages multiple accounts across different banks, ideal for complex corporate structures or syndicated loans
• Securities Control Agreement: Specifically designed for investment accounts and securities held with brokerage firms under SECP regulations
• Hybrid Control Agreement: Combines account and securities control provisions, often used in large corporate financing deals with diverse collateral types
• Islamic Banking Control Agreement: Shariah-compliant version aligned with Islamic banking principles and State Bank of Pakistan guidelines

• Commercial Banks: Act as secured lenders and typically initiate Control Agreements when extending credit facilities to businesses
• Corporate Borrowers: Companies seeking secured financing who must agree to give lenders control over specified accounts or assets
• Account Banks: Financial institutions holding the controlled accounts, responsible for following the lender's instructions
• Legal Counsel: Corporate lawyers who draft and negotiate these agreements to ensure compliance with Pakistani banking laws
• Compliance Officers: Bank officials who monitor adherence to Control Agreement terms and State Bank of Pakistan regulations

• Account Details: Gather complete account numbers, types, and locations of all accounts to be controlled
• Party Information: Collect official names, registration numbers, and authorized signatories of lender, borrower, and account bank
• Loan Documentation: Reference the main credit facility agreement and security documents that the Control Agreement supports
• Operating Instructions: Define clear procedures for account operation, withdrawal restrictions, and permitted transactions
• Compliance Requirements: Ensure alignment with State Bank of Pakistan regulations and Financial Institutions Act guidelines
• Digital Platform: Use our platform to generate a legally-sound Control Agreement that includes all mandatory elements

• Party Identification: Full legal names, addresses, and registration details of lender, borrower, and account bank
• Account Details: Specific description of controlled accounts, including account numbers and types
• Control Rights: Clear explanation of lender's authority over accounts and permitted actions
• Notice Provisions: Communication protocols between parties and response timeframes
• Default Procedures: Steps taken upon borrower default or agreement breach
• Governing Law: Explicit reference to Pakistani law and State Bank regulations
• Termination Terms: Conditions and process for ending the agreement

A Control Agreement differs significantly from an Account Agreement, though both deal with banking relationships. While Control Agreements specifically focus on giving lenders authority over specified accounts in secured lending situations, Account Agreements establish the basic relationship between a bank and its customer.

• Purpose and Scope: Control Agreements serve as security instruments for lenders, while Account Agreements cover general account operations and services
• Parties Involved: Control Agreements require three parties (lender, borrower, bank), whereas Account Agreements are bilateral between bank and customer
• Legal Framework: Control Agreements fall under secured transaction laws and State Bank lending regulations, while Account Agreements align with basic banking service rules
• Operational Impact: Control Agreements restrict account access and require lender approval for transactions; Account Agreements outline standard operating procedures and customer rights