Gurugram RERA issues advisory to banks to monitor withdrawals of funds from its accounts
IANS 16 February 2024
The Haryana Real Estate Regulatory Authority (HARERA), Gurugram, has issued an advisory directing the city-based banks to comply with the provisions of the Real Estate (Regulation and Development) Act, 2016.
It has come to the notice of the Authority that real-estate promoters are not complying with the provisions of the Act in terms of withdrawal of funds from RERA accounts.
As per Section 4 (2) (I) (D) of the RERA Act, promoters are required to maintain a separate bank account for every project in which 70 per cent amount collected from the allottees are to be deposited.
Funds deposited can only be utilised for the land cost and construction cost of the project. This clause ensure that the funds are not diverted and are utilised for that project only.
The amount in a separate bank account can be withdrawn only after obtaining a certificate from an engineer, architect, and practising chartered accountant certifying that the amount withdrawn is in proportion with the construction of the project.
The Authority said it has come to know that still, banks are allowing withdrawal of funds from RERA accounts by real-estate promoters in non-compliance with the provisions laid down under the Real Estate (Regulation and Development) Act, 2016, which is a clear violation of RERA provisions.
Therefore, the banks are also liable and accountable for such offences of non-compliance with the provisions of the Act, the Authority said.
The Authority also said that in case of non-compliance by the real-estate promoters under Section 4 of the Real Estate (Regulation and Development) Act, a penalty of up to 5 per cent of the project cost can be imposed.
The Authority also directed the banks to strictly monitor the withdrawal of funds from the RERA accounts to ensure the same is under the provisions of the Act and Rules 2017 to avoid legal action for such lapses.
For every phase of the project, separate registration needs to be obtained and thus separate bank accounts need to be maintained.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
RBI Restrains a Card Network from Operating Unauthorised Payment Intermediary System
Moneylife Digital Team 15 February 2024
Expressing concerns over a payment intermediary operated by a card network, Reserve Bank of India (RBI) has asked the card network to keep all such arrangements under abeyance till further orders. RBI has not named the card...
Free Helpline
Legal Credit