NEW DELHI: The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has urged banks and financial institutions to adhere to the updated banking regulations and operational guidelines for accounts related to RERA-registered real estate projects.
The authority conducted an awareness meeting with nationalized and scheduled banks at the Bank of Baroda’s regional office in Lucknow to discuss the revised project account directives issued on May 11, 2026.
According to the new regulations, each RERA-registered project must maintain three distinct bank accounts: a collection account, a separate account, and a transaction account. At least 70% of the funds collected from homebuyers must be transferred daily into the separate account, which is designated exclusively for land and construction-related expenses.
Withdrawals from the separate account will only be permitted after presenting certificates from an architect, engineer, and chartered accountant. Banks are instructed not to issue cheque books, debit cards, transaction-enabled net banking, or lien facilities for project accounts.
UP-RERA also specified that when changing project bank accounts, promoters and banks must wait for final approval from the authority before operating newly opened accounts, not just in-principle approval.
The regulator has mandated that no bank, non-banking financial company, lender, investor, or financial institution can enforce a lien on the collection or separate accounts of a project, as these funds are intended strictly for project development and to safeguard homebuyer interests.
Under the updated provisions, interest on loans from NBFCs for project purposes will only be applicable up to the SBI-MCLR rate, aiming to prevent inflated finance costs in project accounts.
Banks and promoters are required to ensure quarterly disclosures of comprehensive project finance details on the UP-RERA portal through an affidavit, including information about project loans, institutional finances, and other borrowings.
Additionally, UP-RERA stated that no operations will be permitted in the collection or separate accounts of projects with lapsed or revoked registrations, which will be frozen until registration is extended or specific approval from the authority is granted.
The regulator clarified that assured return or guaranteed return schemes offered by developers cannot be funded from amounts collected from project allottees.
A standard operating procedure has been introduced for closing separate accounts, which can only be done after project completion and prior approval from UP-RERA. Promoters must submit an online application along with proof of transferring common areas to the resident welfare association or the association of allottees.
Sanjay Bhoosreddy, the chairman of UP-RERA, emphasized that banks play a crucial role in preventing the misdirection of project funds and ensuring timely project completion.
The meeting also covered procedures regarding changing project accounts, freezing and unfreezing accounts, closure mechanisms, and restrictions against unauthorized fund transfers.
