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RERA Current Account
As per the RERA Act, it is mandatory to the promoters to deposit 70% of the client advances or project related funds into a devoted project account, so that those funds can be used for procurement of land and construction of the related project.
Any withdrawals from the specified account should be certified by the project engineer, architecture, and chartered accountants. The said account should also be audited every financial year and the copy of the same should be submitted to the higher authorities. This process will guarantee that the client advanced are not redirected towards other project development and the promoters do not defer/delay the project due to lack of funds.
The RERA General Account shall be opened as an ESCROW operation account and operated as follows:
- 100% of the project receivables collected shall be deposited into the RERA General Account.
- The Bank shall, at EOD every day, transfer the balance in the RERA General Account in the following manner through a “standing instruction”;
- 70% of the amount in the Receivable account shall be transferred to the Project Designated RERA account.
- Balance 30% of the amount in the RERA General Account shall be transferred to the Promoter/Developer/Builder’s current account.
The Project Designated RERA account shall be opened as an ESCROW operation account with account operations subject to the accompanying guidelines:
- All transactions in the account shall be in accordance with the standard norms given in the RERA Act, as in the funds must be used for land acquisition, building, and project completion only.
- Credits, as mentioned above, would be initiated by the Bank on a “standing instruction” basis at EOD every day from the RERA General Account.
- Each withdrawal/transfer from the Project Designated RERA Account shall be made on receipt of a request letter from the Promoter, signed by the authorized signatory of the Promoter (i.e. Project Engineer, Architect & Chartered Accountant)
- The Promoter/Builder/Developers account shall be opened as a RERA Current account.