Builders in Maharashtra cannot change or transfer designated bank account without permission from MahaRERA

Vasant Prabhu, secretary of MahaRERA, issued a circular on February 20, which will come into force immediately, making it compulsory for builders to inform the authority of any change or transfer of bank account.

According to a MahaRERA official, this was done to secure the interest of homebuyers and ensure timely project completion. The authority has often observed that a particular real estate project gets stuck after the funds meant for that specific project completion were diverted for some other purpose.

Section 4 (2)(l)(D) of the RERA Act provides that 70 per cent of the amounts realised for the real estate project from the homebuyers (allottees), from time to time, needs to be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and to be used only for that purpose. However, as per MahaRERA, it has been observed that builders change or transfer the separate designated bank account from one scheduled bank/branch to another without bringing such change/transfer to the notice of the authority.

MahaRERA says a separate account in a scheduled bank is critical and crucial for timely project progress and effective monitoring, allowing the authority to make informed decisions about project risks, corrective actions and project advancement.

Meanwhile, at the time of change or transfer of a bank account, the builder has to give a self-declaration on a letterhead explaining the rationale for the change or transfer. The declaration should be notarised and other essential documents submitted to MahaRERA.