RERA 70% Account Cannot Be Changed To Another Bank/Branch Without MahaRERA's Consent

Background

In terms of Section 4(2)(l)(D) (defined hereunder) of the Real Estate (Regulation and Development) Act, 2016 ("the Act") a promoter is required to deposit seventy percent of the amounts realized for the real estate project from the allottees in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose.

The abovementioned "schedule bank" means a bank included in the Second Schedule to the Reserve Bank of India Act, 1934. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative Banks. The objective of implementing the provision for a separate bank account was to stop the Promoters to diverge the funds collected from the allottees.