The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) conducted an awareness meeting at the Bank of Baroda regional office in Gomtinagar, Lucknow, to brief banks on revised regulations governing RERA-registered project accounts. The session aimed to ensure compliance with the updated framework designed to improve financial discipline and transparency in the real estate sector.
Three-Account System Mandated
Officials explained the newly mandated three-account system, which includes a collection account, a separate account, and a transaction account. Under this system, 70% of homebuyer collections will be automatically transferred to the separate account, which is strictly reserved for land and construction expenses. Withdrawals from this account require certification from an architect, engineer, and chartered accountant, ensuring accountability at every stage.
Restrictions and Prohibitions
UP RERA also directed banks to restrict facilities such as cheque books, debit cards, and transaction-enabled net banking for project accounts. It clarified that no operations can begin in newly opened accounts without final approval. Additionally, lien creation on project accounts has been prohibited to safeguard buyer funds.
Quarterly Disclosures and Interest Cap
Quarterly financial disclosures have been made mandatory for all RERA-registered projects. Interest on Non-Banking Financial Company (NBFC) loans has been capped at the State Bank of India Marginal Cost of Funds based Lending Rate (SBI-MCLR). Authorities emphasized that these reforms aim to strengthen transparency, prevent misuse of funds, and protect homebuyers' interests while ensuring timely project completion.
