Uttar Pradesh Real Estate Regulatory Authority (UP RERA) Friday said it has devised a new roadmap to solve the ongoing issues of homebuyers, which includes making the banking process related to real estate projects more stringent and transparent.
The authority said that along with the promoters, now it will also be the responsibility of the financial institutions and banks to provide information about the bank accounts opened for real estate projects to UP RERA.
They said that a guideline is also being prepared in this regard by the authority and it will soon be directed to the State Level Bank Committee (SLBC) to ensure its implementation.
Under the standard procedure of UP RERA, the promoter has to open three bank accounts for a project: Collection Account, Separate Account and Expenditure Account. As per the previous arrangement, the details of all three bank accounts are being uploaded by the promoter on the RERA portal.
The objective of this process was to ensure the utilisation of funds collected for the particular project, is being used only in construction and development of that project by the promoters.
However, during the review of the project details, UP RERA found that many promoters have not updated details of all three accounts on the portal, which is against the objectives of the RERA Act. To resolve the issue and hold the builders accountable, UP RERA has shared the responsibility with the financial institutions too to provide details of the bank accounts.
An official said that the promoters will provide a certified copy to RERA that will be verified by RERA from banks or financial institutions. The financial institutions are one of the key stakeholders of the real estate sector and their role is very important in implementation of the RERA Act, the officer said.
Uttar Pradesh RERA Chairman Sanjay Bhoosreddy said that the purpose of providing information about the project’s bank accounts to RERA by the promoter is to keep the details of the amount being used in the construction of the project, its transactions and expenditure transparent.
“It is very important for a project that the funds collected for the project should be used by the promoter for the construction and development of that project only. We will see the result of this effort in the near future. The objective of making project related banking transparent will also be achieved by submitting records of bank accounts through both the promoter and the bank,” Bhoosreddy said.
He further said that the promoters, who have not yet uploaded the information of the three bank accounts, are being said to upload details immediately.