Many homebuyers have been suffering financially and mentally because of delayed possession of property or misuse of their money. To protect the buyers, the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) introduced new rules for banks and financial institutions.
UP-RERA conducted an awareness meeting with nationalised and scheduled banks on May 11, 2026, during which new rules were introduced.
Previously, the builders collected money from homebuyers, transferred it to other projects, worked on unrelated expenses, or delayed the construction due to a lack of funds. Resulting in a project delay, continuation of home loans, and postponement of possession.
To protect the buyers, the new norm was introduced in which every RERA-approved project must have three separate bank accounts: a collection account, a separate RERA account, and a transaction or operational account.
The collection account will act as the first account in which buyers’ payments will be received, such as booking amounts, installment payments, and more. Then, a major portion of the money must be quickly moved to the RERA controlling account.
A separate RERA account is a key protection one, in which nearly 70% of the buyer’s money must be deposited. The fund can be used for construction and land costs, and project-related expenses. It cannot be used in another project, for the developer’s expenses, or in any unrelated transactions.
Then, an operational or transactional account, in which the withdrawals will be allowed only after the submission of certificates from the architect, engineer, and Chartered Accountant (CA). Banks are not allowed to provide cheques, debit cards, or any net banking facilities on project accounts.
UP-RERA has also confirmed that banks should hold the responsibilities for account verification, fund monitoring, and ensure that the transactions are compiled under RERA rules. Further, no operations will be allowed in these accounts whose registration has lapsed or been revoked. Such accounts will be frozen and can be reactivated only after approval is received from the authority.
Sourced from Business Standard.
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