Three-account system, stricter withdrawals and zero lien policy to curb fund diversion.

UP-RERA Tightens Banking Rules to Safeguard Homebuyer Funds.

The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has directed banks and financial institutions to strictly enforce revised operational guidelines for RERA-registered real estate project accounts. Announced during an awareness meeting at Bank of Baroda’s Lucknow regional office, the norms mandate a three-account structure—collection, separate and transaction accounts—for every registered project. At least 70% of homebuyer collections must be transferred daily to the separate account, usable only for land and construction expenses, with withdrawals allowed solely against certifications from an architect, engineer and chartered accountant. Banks are barred from issuing cheque books, debit cards, net banking or creating liens on project accounts. Operations of new or changed accounts can begin only after final UP-RERA approval. The regulator has capped admissible NBFC loan interest at SBI-MCLR rates, mandated quarterly finance disclosures on the UP-RERA portal, and clarified that assured return schemes cannot be funded from buyer collections. According to Chairman Sanjay Bhoosreddy, the measures aim to prevent fund diversion and ensure timely project completion.