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The Gujarat Real Estate Regulatory Authority (GujRERA) will implement new banking rules from January 1, 2025, requiring developers to maintain three separate bank accounts for each project. These accounts-RERA collection, retention, and transaction-will ensure financial transparency and proper fund utilization. The RERA retention account, holding 70% of collected funds, is designated for construction and land costs, with withdrawals requiring certified progress documentation. Auto-sweep transfers will distribute funds in a 70:30 ratio to retention and transaction accounts. Banks are restricted from issuing cheque books, debit cards, or online services for the collection account. Non-compliance can result in penalties up to 5% of project costs, reinforcing accountability in Gujarat's real estate sector.
The Gujarat Real Estate Regulatory Authority (GujRERA) has announced new banking rules set to come into effect from January 1, 2025. Under these new regulations, developers will be required to maintain three separate bank accounts for each project to ensure greater transparency in financial transactions. All ongoing projects will be expected to transition to this three-account system, in line with the new guidelines. GujRERA has also instructed banks to restrict the issuance of cheque books and debit cards for the RERA collection bank account, which will be used exclusively for depositing payments from buyers. Advertisement
Sources from GujRERA told TNN reporters that many banks in different districts had previously allowed developers to withdraw funds without verifying progress certificates from professionals. This lack of oversight led to the introduction of stricter rules to improve the system. According to the new Gujarat RERA Bank Account Directions 2025, developers must open a RERA collection bank account to receive payments from buyers as per the sale agreement, including charges for amenities, but excluding pass-through charges and indirect taxes.
The second account, called the RERA retention bank account, will hold 70% of the funds collected in the RERA collection account. This amount will be exclusively used for construction and land costs, as outlined in Rule 5 of the Gujarat Real Estate (Regulation and Development) General Rules, 2017. The third account, the RERA transaction bank account, will handle up to 30% of the collected funds and will be used for expenses unrelated to construction and land.
As per GujRERA sources, withdrawals from the RERA retention account will require certifications, including Form 1 (Architect Certificate), Form 2 (Engineer Certificate), and Form 3 (CA Certificate), all of which need to be uploaded on the GujRERA portal. Developers who maintain RERA accounts in banks outside Gujarat will be required to transfer them to branches within the state. Additionally, GujRERA has mandated that banks implement auto-sweep transfers in a 70:30 ratio from the RERA collection account to the other two accounts.
The authority has also prohibited the issuance of cheque books, debit cards, and online banking services for the RERA collection account. Developers who provide false information or fail to comply with the rules will face penalties of up to 5% of the project cost, according to the new regulations.
GujRERA's new banking rules, effective from January 2025, aim to enhance financial transparency and accountability in real estate projects. By mandating developers to use three separate bank accounts for managing project funds, the authority seeks to prevent misuse of funds and ensure that construction-related payments are handled properly. The strict rules on fund withdrawals and certifications, along with penalties for non-compliance, will likely help strengthen the real estate sector's regulatory framework. These measures are a significant step toward promoting transparency and trust in the industry.
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