Escrow accounts play a vital role in securing financial transactions in India, especially in high-value deals like mergers, acquisitions, and real estate. These accounts involve a third-party agent holding funds or assets until specific conditions are met, ensuring protection and minimizing fraud risks.
The legal framework governing escrow accounts includes the Indian Contract Act, 1872, the Banking Regulation Act, 1949, and SEBI Regulations. These laws ensure compliance with domestic and international regulations, with authorities like RBI and SEBI overseeing their use in various sectors, including corporate transactions and cross-border deals.
Legal firms manage escrow accounts by drafting agreements, securing approvals, and appointing trusted escrow agents. They also perform due diligence to mitigate risks, ensuring compliance with laws and protecting all parties involved in transactions across industries like M&A, real estate, and e-commerce.
