What is Escrow account?

An account in which money (sometimes documents or property) is held by a neutral third party, usually a bank, until a condition agreed by the parties to a transaction is fulfilled. The money has left the buyer but has not yet passed to the seller: the third party holds it and, once a document confirming that the condition has been met arrives, transfers it to the seller, or returns it to the buyer if the condition is not met. This reduces the risk for both parties: the seller is confident that the money exists, and the buyer does not fear that the money will be gone before the item is handed over. It is widely used in real estate, business acquisitions and large supply contracts. The conditions, the term and the third party's fee are written in a separate agreement.

Source: Arthapedia (Indian Economic Service): escrow account