Uttar Pradesh Real Estate Regulatory Authority (UP RERA) recently organized an important awareness meeting regarding the revised banking regulations and operational guidelines for RERA-registered real estate project accounts. The meeting aimed to sensitize nationalized banks and financial institutions about the newly introduced compliance framework and regulatory provisions.

Senior Officials Attended the Meeting

The meeting was chaired by UP RERA Chairman Mr. Sanjay Bhoosreddy, UP RERA Secretary Mr. Mahendra Verma and State Level Bankers’ Committee (SLBC), Uttar Pradesh Chief General Manager, Convenor Mr. Shailendra Kumar Singh and all AGMs & Chief Managers of all the Nationalised and scheduled banks were also present on the occasion.

Mandatory Three-Account System Explained

In the meeting the revised Project Account Directions and banking regulations issued by UP RERA on May 11, 2026. The meeting highlighted that every RERA-registered project will now mandatorily maintain three separate bank accounts — Collection Account, Separate Account and Transaction Account. Under the revised provisions, a minimum of 70% of the amount collected from homebuyers will be auto-transferred daily into the Separate Account, which can only be utilized for land and construction-related expenses.

Three-Certification Withdrawal Mechanism

It was further explained that withdrawals from the Separate Account would only be permitted after submission of mandatory certificates issued by an Architect, Engineer and Chartered Accountant. Banks were also instructed not to provide cheque books, debit cards, transaction-enabled net banking or lien facilities on project accounts.

No Operations Allowed Before Final Approval of Authority

UP RERA clarified that in cases involving change of project bank accounts, banks and promoters will not be permitted to start operations in the newly opened accounts merely on the basis of “in-principle approval.” Operations in the new accounts can commence only after receiving “final approval” from the Authority. The provision has been introduced to ensure transparency and prevent unauthorized transfer or diversion of project funds.

No Lien Permitted on Separate and Collection Accounts

The Authority also directed that no bank, NBFC, lender, investor or financial institution shall be allowed to create any lien on the Collection Account or Separate Account of a project. UP RERA emphasized that funds deposited in these accounts are meant exclusively for project development and protection of homebuyers’ interests.

Interest on NBFC Loans Restricted to SBI-MCLR

Under the revised provisions, interest expenditure on loans taken from NBFCs for project purposes shall now be admissible only up to the SBI-MCLR rate. UP RERA stated that this restriction has been introduced to prevent inflated finance costs and misuse of project funds.

Quarterly Disclosure of Project Finance Made Mandatory

The meeting further informed banks and promoters that complete details of project finance availed for the project will now have to be uploaded on the UP RERA portal every quarter through an affidavit. The disclosures will include information regarding project loans, institutional finance and other borrowing details, thereby strengthening financial monitoring and transparency.

No Banking Operations Allowed in Lapsed Projects

UP RERA also directed banks that no operations shall be permitted in Collection or Separate Accounts of projects whose registration has lapsed or been revoked. Such accounts will be frozen immediately and can only be reactivated after extension of registration or specific approval/orders from the Authority.

Restrictions on Assured Return Schemes

The meeting also clarified that “Assured Return”, “Guaranteed Return” or similar incentive-based schemes offered by developers to buyers can no longer be paid from funds collected from allottees of the project. UP RERA emphasized that homebuyer funds must only be utilized for project development and construction-related activities. The provision has been introduced to prevent diversion of project funds and strengthen financial discipline within the real estate sector.

New SOP for Closure of Separate Accounts

Detailed discussions were also held regarding the newly introduced Standard Operating Procedure (SOP) for closure of Separate Accounts of projects. UP RERA informed that the Separate Account of any project can now be closed only after completion of the project and prior approval from the Authority. Promoters will be required to submit an online application seeking permission for closure of the account. Additionally, proof regarding transfer of common areas to the Resident Welfare Association (RWA) or Association of Allottees (AoA) will also have to be submitted. Only after approval from UP RERA will banks be allowed to release the remaining balance and formally close the account.

Focus on Transparency and Homebuyer Protection

UP RERA Chairman Mr. Sanjay Bhoosreddy emphasized that ensuring transparency, accountability and protection of homebuyers’ interests remains the top priority of UP RERA. He stated that banks have a crucial role in preventing diversion of project funds and ensuring timely completion of projects.

Strict Monitoring of Fund Transfers and Project Accounts

The meeting also clarified that all project finance disbursements must be credited directly into the Separate Account and that banks must not permit operation of unauthorized fourth accounts or any fund transfer mechanism contrary to RERA regulations. Detailed discussions were also held on procedures relating to change of project accounts, freezing and de-freezing of accounts and closure mechanisms.

Objective of the Revised Guidelines

Officials stated that the revised directions aim to strengthen financial discipline in the real estate sector, enhance homebuyer confidence and ensure transparent utilization of project funds.