Procedure for opening an escrow account

This query is : Resolved 

03 March 2011

Dear All,
Our Company wants to open an escrow account for buy back of company's shares.
will you tell me the procedure of opening an escrow account with bank name , branch, contact no (In delhi Only)

Best Regards,

bhupender soni (Expert)
21 June 2011

The company should deposit in an escrow account opened with a scheduled commercial bank on or before the opening of the offer for buy back of securities following sum as is specified below –
1- Estimated consideration payable for buy-back does not exceed rs 100 cr , 25% of the consideration payable
2- If consideration exceeds rs 100 cr , 25 % upto rs 100 cr and 10 % of the balance
And where a company opts to deposit cash in an escrow account it should empower the merchant banker to instruct the bank to issue a bankers cheque or demand draft for the amount lying to the credit of the escrow account in the favors
And where the account opened by the company consists of bank guarantee it should be in favour of the merchant banker and should remain valid for 30 days after the closure of the offer and guarantee should not be returned by the merchant banker till the completion of and obligation under the regulation

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