In a landmark move to enhance financial discipline and safeguard consumer interests in real estate, the Andhra Pradesh Real Estate Regulatory Authority (AP RERA) has issued detailed guidelines on the maintenance and operation of RERA-designated bank accounts for registered real estate projects. These guidelines, titled “AP RERA Directions for Maintenance and Operation of RERA Designated Bank Accounts of Registered Projects, 2025”, were issued on March 28, 2025, under Section 37 of the Real Estate (Regulation and Development) Act, 2016.
Purpose and Legal Backing
The directions aim to enforce compliance, transparency, and accountability in how project funds are collected, maintained, and utilized. Issued under Section 37 of the RERA Act, the guidelines empower AP RERA to regulate the manner in which designated accounts are operated, thereby preventing diversion of funds and ensuring timely completion of real estate projects.
Key Objectives of the Guidelines
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Protect homebuyers’ funds by ring-fencing them through clearly defined accounts
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Standardize the use of collections to ensure only permissible expenditures
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Increase transparency through mandatory audit and reporting procedures
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Promote timely project completion by tracking fund utilization
These objectives align with the broader goals of the Real Estate (Regulation and Development) Act, 2016, to improve professionalism in the sector.
Three-Mandated RERA Bank Accounts
Promoters must open three separate accounts in a single branch of a scheduled bank in Andhra Pradesh:
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RERA Collection Bank Account
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Receives 100% of collections from allottees (excluding taxes and pass-through charges)
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Acts as the primary deposit point
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RERA Separate Bank Account
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Auto-sweeps 70% of the collections from the Collection Account
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Funds here are used exclusively for land and construction costs
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RERA Transaction Bank Account
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Holds the remaining 30%
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Used for operational and administrative expenses, including taxes
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All accounts must follow a specific naming convention with the promoter’s and project’s names.
Operation and Withdrawal Protocols
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Automatic fund transfer ensures segregation of expenses
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Withdrawals must be certified by professionals such as Architects, Engineers, and Chartered Accountants
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Promoters must submit withdrawal forms and CA-certified statements quarterly
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An annual audit report is mandatory to maintain financial transparency
Changing and Closing of Accounts
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Bank account changes require prior AP RERA approval
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On project completion, a formal project closure application is needed
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Only after AP RERA’s approval can the accounts be legally closed
Responsibilities of Stakeholders
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Promoters: Must adhere to account structures, reporting obligations, and maintain audit trails
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Banks: Must implement auto-sweep mechanisms, halt transactions on registration lapse, and notify non-compliance
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Professionals: Must issue genuine certificates and are subject to penalties for false or misleading declarations
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Allottees: Must deposit payments only in the RERA Collection Bank Account
Conclusion
AP RERA’s 2025 directions mark a significant step in curbing fund misappropriation and strengthening buyer confidence in the real estate sector. With stringent compliance norms, mandatory reporting, and well-defined fund usage channels, these new guidelines bring greater clarity, accountability, and efficiency into the financial ecosystem of real estate project development in Andhra Pradesh.
By involving all stakeholders—promoters, banks, professionals, and buyers—the initiative fosters a balanced and transparent development environment, in alignment with the national vision for regulated urban housing growth.
