UPRERA writes to committee over management of real estate project bank accounts

By Bricksnwall | 2023-10-15

UPRERA seeks to ensure that real estate projects' bank accounts are managed in accordance with the RBI's (Reserve Bank of India) guidelines and the RERA Act.

UPRERA intends to make sure that all new real estate projects have separate bank accounts for the collection account, distinct account (the project account), and expenditure account.

In order to ensure that real estate projects' bank accounts are managed in accordance with the Reserve Bank of India's (RBI) and RERA Act directives, the Uttar Pradesh Real Estate State Level Bank Committee (SLBC) has received a letter from the UPRERA regulatory authority.

The Authority has stated that the banks and financial institutions should make sure that the promotors open three different types of accounts for all new real estate projects: a collection account, a separate account (project account), and an expenditure account.

Promoters will direct banks on a regular basis to automatically withdraw 70% and 30%, but no more, of the funds from collecting accounts and deposit them in separate accounts and transaction accounts, respectively, throughout the process of setting bank accounts for real estate projects. Debit cards, checkbooks, and net banking services will not be provided to the promoter by the banks, the UPRERA said in a statement. To ensure that the number of distinct accounts is used in the project's planning and construction, bank accounts will only be opened in the name of the primary promoter.

The authority stated that banks and financial institutions should guarantee that these regulations are followed. Banks will be required to provide the information to the UPRERA office, and the promoter will upload it on the website www.up-rera.in.

Chairman of UPRERA Sanjay Bhoosreddy stated, "We have endeavored to ensure that it is used only in construction and to create a transparent system of opening and managing bank accounts associated with projects. We are making every effort to ensure that arrangements from banks and promoters will provide the necessary openness in the financial system relating to project accounts.