Uttar Pradesh Real Estate Regulatory Authority (U.P. RERA) has issued the 3rd Revision to the U.P. Real Estate Project (Maintenance and Operation of Project Bank Accounts) Directions, 2020. These directions subsume all previous directions and orders in relation to the maintenance and operation of RERA Project Accounts and form part of Regulation 53 of the U.P. RERA Regulations. The previous directions issued in November 2023 vide No. 14297/Separate Account/F&A/2023-24 dated 29-11-2023 stand substituted by these directions.

These directions apply to all promoters of real estate projects registered with U.P. RERA and to banks and NBFCs maintaining or financing such projects.

Three Bank Accounts: The promoter is required to maintain three accounts — Collection Account, Separate Account, and Transaction Account — in a single scheduled bank in the project district. All three account details are to be submitted at the time of project registration.

Collection Account: A NO LIEN account. A minimum of 70 percent of allottee collections are auto-transferred to the Separate Account and not more than 30 percent to the Transaction Account on a daily basis. No debit or withdrawal is permitted except through the prescribed auto-sweep.

Separate Account: A NO LIEN account. Funds are restricted to land cost, construction cost, project clearance fees, and permissible loan interest. Withdrawals require certificates from the Architect (REG-1), Engineer (REG-2), and Chartered Accountant (REG-3), each with a valid UDIN, generated through the U.P. RERA portal only. No assured return, incentive, or payment by whatever name called is admissible as expenditure for withdrawal from this account.

Transaction Account: Funds may be used for expenses other than those directly related to construction and development. No amounts on account of interest, penalty, fine, or compensation are admissible as expenditure from this account.

Changing Bank Accounts: Permitted only under exceptional circumstances. In-principle approval does not permit commencement of operations in new accounts. Operations in new accounts can begin only after Final Approval by U.P. RERA.

Closure of Separate Account: Application for closure is to be made online after receipt of Completion/Occupancy Certificate, along with Form REG-4A, final Form REG-3, affidavit in Form RA-6, and proof of transfer of common areas to RWA/AoA.

Bank Obligations: Banks shall follow all provisions of these directions, place no lien on Collection and Separate Accounts, restrict sweeps/withdrawals on lapse of project registration, and disburse home loans only into the Collection Account. Banks and NBFCs shall not settle or adjust any home loan amount with the promoter without prior written consent of the concerned allottee.

Non-compliance: Punishable under Sections 60 and 63 of the RERA Act with penalty up to five percent of the cost of the project.