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A Control Agreement is a legal contract that gives lenders control over a borrower's bank accounts or investment accounts as collateral for a loan. In the UAE banking sector, these agreements play a crucial role in secured lending by establishing the lender's rights to access and manage the pledged accounts if the borrower defaults.

Under UAE Commercial Transactions Law, Control Agreements help protect lenders' interests while allowing borrowers to continue using their accounts for daily operations. They're particularly common in project financing and corporate lending, where banks need strong security over deposit accounts. The agreement must comply with UAE Central Bank regulations and typically involves three parties: the lender, borrower, and the financial institution holding the accounts.

Consider implementing a Control Agreement when securing business loans against deposit accounts or investment portfolios in the UAE. This becomes essential for large corporate borrowings, project financing, or when your company needs to pledge accounts as collateral while maintaining day-to-day access to funds.

Banks in Dubai and Abu Dhabi often require Control Agreements for credit facilities exceeding AED 10 million, particularly in construction and trade finance. The agreement proves especially valuable during complex transactions involving multiple lenders, or when your business needs flexible access to pledged accounts while still providing robust security to creditors under UAE banking regulations.

• Single-Account Control Agreements: Cover one specific account, commonly used for straightforward corporate loans in UAE banks
• Multi-Account Control Agreements: Cover multiple accounts across different UAE banks, ideal for complex project financing
• Hybrid Control Agreements: Allow partial operational control while maintaining security, popular in UAE trade finance
• Springing Control Agreements: Security rights activate only upon default, common in Dubai International Financial Centre deals
• Syndicated Control Agreements: Designed for multiple lenders sharing security over accounts, used in large UAE infrastructure projects

• Banks and Financial Institutions: Act as lenders and require Control Agreements to secure their loans against borrowers' accounts
• Corporate Borrowers: UAE companies pledging their accounts as collateral while maintaining operational access
• Account Banks: Hold the controlled accounts and must follow the agreement's terms regarding access and transfers
• Legal Counsel: Draft and review agreements to ensure compliance with UAE banking regulations and Sharia principles
• Corporate Officers: Sign on behalf of their companies and manage daily account operations under the agreement's terms

• Account Details: Gather complete information about all accounts to be controlled, including account numbers and UAE bank branch details
• Party Information: Collect corporate documents and signing authorities for all involved parties
• Security Terms: Define exact conditions for account access, permitted transactions, and default triggers
• Bank Requirements: Confirm specific documentation needs from the account-holding bank under UAE regulations
• Operational Rules: Establish clear procedures for daily transactions and emergency account access
• Compliance Check: Verify alignment with UAE Central Bank guidelines and Sharia compliance requirements

• Party Identification: Full legal names and details of lender, borrower, and account bank under UAE law
• Account Details: Precise description of controlled accounts, including account numbers and bank branches
• Control Rights: Clear terms defining lender's authority over accounts and permitted actions
• Operating Procedures: Specific rules for daily transactions and account management
• Default Provisions: Detailed triggers and consequences of default under UAE banking regulations
• Governing Law: Explicit reference to UAE law and relevant emirate jurisdiction
• Notice Requirements: Communication protocols between parties following UAE legal standards

A Control Agreement differs significantly from an Account Agreement in both scope and purpose. While both deal with bank accounts, they serve distinct functions in UAE banking practice.

• Security Focus: Control Agreements specifically establish lender rights over pledged accounts as collateral, while Account Agreements outline basic terms for operating bank accounts
• Party Structure: Control Agreements involve three parties (lender, borrower, bank), whereas Account Agreements typically involve just the bank and account holder
• Legal Authority: Control Agreements grant specific powers to lenders for securing loans, while Account Agreements define general account management rights
• Regulatory Framework: Control Agreements must comply with UAE secured lending laws and Central Bank regulations, while Account Agreements follow standard banking terms and conditions
• Duration: Control Agreements typically last until loan repayment, while Account Agreements continue indefinitely until account closure