NEW DELHI: The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has asked banks and financial institutions to comply with revised banking regulations and operational guidelines for RERA-registered real estate project accounts.
The authority held an awareness meeting with nationalised and scheduled banks at the Bank of Baroda regional office in Lucknow to discuss the revised project account directions issued on May 11, 2026.
Under the revised norms, every RERA-registered project will have to maintain three separate bank accounts: collection account, separate account and transaction account. At least 70% of the amount collected from homebuyers will have to be transferred daily into the separate account, which can be used only for land and construction-related expenses.
Withdrawals from the separate account will be allowed only after submission of certificates from an architect, engineer and chartered accountant. Banks have been asked not to provide cheque books, debit cards, transaction-enabled net banking or lien facilities on project accounts.
UP-RERA also clarified that in cases involving change of project bank accounts, promoters and banks cannot begin operating newly opened accounts on the basis of in-principle approval. Operations can start only after final approval from the authority.
The regulator has directed that no bank, non-banking financial company, lender, investor or financial institution can create any lien on the collection account or separate account of a project. It said funds in these accounts are meant only for project development and protection of homebuyer interests.
Under the revised provisions, interest expenditure on loans taken from NBFCs for project purposes will be admissible only up to the SBI-MCLR rate. The authority said the restriction is aimed at preventing inflated finance costs from being charged to project accounts.
Banks and promoters have also been asked to ensure quarterly disclosure of complete project finance details on the UP-RERA portal through an affidavit. These disclosures will include project loans, institutional finance and other borrowings.
UP-RERA said no operations will be allowed in the collection or separate accounts of projects whose registration has lapsed or been revoked. Such accounts will be frozen and can be reactivated only after extension of registration or specific approval from the authority.
The regulator also clarified that assured return, guaranteed return or similar schemes offered by developers to buyers cannot be paid from funds collected from allottees of the project.
The authority has also introduced a standard operating procedure for closure of separate accounts. A separate account can be closed only after completion of the project and prior approval from UP-RERA. Promoters will have to submit an online application and proof of transfer of common areas to the resident welfare association or association of allottees.
Sanjay Bhoosreddy, chairman, UP-RERA said banks have a role in preventing diversion of project funds and ensuring timely completion of projects.
The meeting also discussed procedures related to change of project accounts, freezing and de-freezing of accounts, closure mechanisms and restrictions on unauthorised fund transfer structures.
