{"id":12114,"date":"2020-07-03T17:40:13","date_gmt":"2020-07-03T12:10:13","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=12114"},"modified":"2020-07-03T17:44:00","modified_gmt":"2020-07-03T12:14:00","slug":"change-karnataka-rera-bank-account-in-karnataka","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/change-karnataka-rera-bank-account-in-karnataka\/","title":{"rendered":"How to change Karnataka RERA Bank Account in Karnataka?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Karnataka RERA Bank Account means a separate bank account to be maintained by a promoter in the scheduled bank in the local branch where the project is going on. In-State of Karnataka, according to section 4(2) (I) (D) of Act covers the land cost of the project and the cost of construction. The promoter can change the RERA Bank Account from one bank to another Bank only with the prior permission of the Authority.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/change-karnataka-rera-bank-account-in-karnataka\/#Karnataka_RERA_Bank_Account_change_request\" >Karnataka RERA Bank Account change request<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/change-karnataka-rera-bank-account-in-karnataka\/#Important_aspects_of_the_circular_are_enumerated_to_understand_and_implement\" >Important aspects of\nthe circular are enumerated to understand and implement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/change-karnataka-rera-bank-account-in-karnataka\/#Karnataka_RERA_Bank_Account_Modification\" >Karnataka RERA Bank\nAccount Modification<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/change-karnataka-rera-bank-account-in-karnataka\/#Certificate_from_CA_certifies_that_the_promoter_has_withdrawn_money\" >Certificate from CA certifies\nthat the promoter has withdrawn money<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/change-karnataka-rera-bank-account-in-karnataka\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Karnataka_RERA_Bank_Account_change_request\"><\/span>Karnataka RERA Bank Account change request<em><\/em><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Promoter has to submit documents through the Authority&#8217;s web portal along with the application in the following forms:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Application for change in Karnataka RERA Bank Account in Form 5 along\nwith the applicable Affidavit as prescribed therein along with the Board\nResolution from the concerned applicant (if the applicant is other than\nindividual).<\/li><li>Certificate of an account balance from a bank with an existing RERA Bank\nAccount in Form 6.<\/li><li>Account Statement and Copy of Passbook of account proposed as new RERA\nBank Account.<\/li><li>The Proposed Karnataka RERA Bank Account must be opened in the local\nbank branch, where the project is situated in the state of Karnataka.<\/li><\/ul>\n\n\n\n<p>The promoter is also required to submit a fund transfer compliance letter in Form 7 (Confirmation letter for change in RERA Bank Account) along with Form 8 (Certificate of fund transfer from a bank) with a new RERA Bank Account and Proof of previous RERA Bank Account closure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Important_aspects_of_the_circular_are_enumerated_to_understand_and_implement\"><\/span>Important aspects of\nthe circular are enumerated to understand and implement<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are few important aspects of the circular are enumerated to understand and implement, which are as follows:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Opening and Operating \u2013<\/h3>\n\n\n\n<ul><li>Every project must have a separate bank account<\/li><li>Such account must be opened in Scheduled Bank<\/li><li>Bank Branch (Home Branch) must be at where the project is going on<\/li><li>Such account must be No Lien Account<\/li><li>Such account suffix a term RERA Bank Account in (project name) with the\nRERA Bank Account Holder<\/li><li>Only one RERA Bank Account for each project (there shall be legal\narrangements amongst the promoters viz., builder, landowners, etc. for\noperating such bank account)<\/li><li>Such RERA Bank accounts must open and submit the details along with an\napplication for grant of registration of the project<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Deposits in Account \u2013<\/h3>\n\n\n\n<ul><li>70% of the amount collected or realized from the Allottees must deposit\ninto designated RERA bank account only (other than Pass-through charges and\nIndirect Taxes)<\/li><li>Where the cost required to spend is more than sales revenue, then 100 %\nof realization must be deposited<\/li><li>Surplus amount in designated RERA bank account can be deposited in a\nFixed Deposit (such FD must be No Lien or No charge Account)<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Withdrawal from Account\n\u2013<\/h3>\n\n\n\n<ul><li>Withdrawal from an account after it is certified by Architect, Engineer and Chartered Accountant in practice.<\/li><li>Withdrawal is allowed in proportion to the percentage completion of the project.<\/li><li>Amount withdrawn must be utilized for the purpose of completion of the same Real Estate Project.<\/li><li>There is no End-use restriction on the amount withdrawn from the RERA Bank Account.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/guide-on-rera-registration-for-real-estate-agents\/\">Guide on RERA Registration for Real Estate Agents\n<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Karnataka_RERA_Bank_Account_Modification\"><\/span>Karnataka RERA Bank\nAccount Modification<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Section 4<\/strong> of the <strong>RERA Act 2016<\/strong><sup><a href=\"https:\/\/www.indiacode.nic.in\/handle\/123456789\/2158?locale=en\"><strong>[1]<\/strong><\/a><\/sup> mandates every promoter to open and maintain the Project wise bank account in Scheduled Bank. The objective and intention of the RERA Act are to ensure the money collected from the allottees for the Specific project must be utilized for the specific project and to avoid any diversion or diversification of funds by the promoter for better opportunities.<\/p>\n\n\n\n<p><strong><em>On grant of registration of a project, designated bank account must be used to deposit the 70 % of the amount collected from the Allottee \u2013<\/em><\/strong><\/p>\n\n\n\n<ul><li>Sec. 4 (2) (l) (D) that 70% of the amounts realized for the real estate project from the allottees as in time to time, must be deposited in a separate bank account. It is to be maintained in a scheduled bank to cover the cost of construction and the land cost. It must be used only for that purpose.<\/li><li>Few of the authorities have printed the designated project bank account details in the <a href=\"https:\/\/corpbiz.io\/rera-registration\"><strong>RERA Registration<\/strong><\/a> Certificates so that the Allottees and housing loan companies shall release the funds to the respective project bank account.<\/li><\/ul>\n\n\n\n<p><strong><em>Any deviation from\nthe usage of the designate bank account, the promoter must obtain PRIOR\napproval of the Authority<\/em><\/strong><\/p>\n\n\n\n<ul><li>Online Application<\/li><li>Documents \/ Certificates<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Certificate_from_CA_certifies_that_the_promoter_has_withdrawn_money\"><\/span>Certificate from CA certifies\nthat the promoter has withdrawn money<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In compliance with Section 4(2) (l) (d) of an Act after application received, Authorities can call for a hearing, verification of documents, compliance, and on satisfaction, must be allowed to use the new bank account for the project.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"588\" height=\"211\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-16.png\" alt=\"Certificate from CA certifies\" class=\"wp-image-12115\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-16.png 588w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/07\/image-16-300x108.png 300w\" sizes=\"(max-width: 588px) 100vw, 588px\" \/><\/figure><\/div>\n\n\n\n<p>In many\ncircumstances, lenders or financial institutions insist the promoter deposit\nthe money collected to a loan escrow bank account. We recommend all promoters\nto obtain the prior approval by filing a necessary application, documents, and\nrequirements.<\/p>\n\n\n\n<p>Non-compliance with the requirement and provisions of the Act may result in levying of penalty by the Authorities as per sec 61 if any promoter contravenes with any other provisions of this Act, other than that given under section 3 or section 4, or the rules and regulations thereunder. He must be liable to a penalty which can extend up to 5% of the estimated cost of a real estate project as determined by the Authority.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In order\nto protect Allottees and bring discipline amongst the Promoters, the\nutilization of funds must be proper. The Act mandates that 70% of the money\ncollected from the allottees must be deposited in a separate Karnataka RERA bank account for a designated project bank account which is not escrow\naccount. <\/p>\n\n\n\n<p>However, many promoters, professionals pronounce it as escrow, and withdrawal of such money must be based on a percentage of completion of the development of a project. While filing an application for Grant of Registration of project Bank Account details are given to the Authority.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/guidelines-related-to-rera-karnataka\/\">Guidelines related to RERA Karnataka\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Karnataka RERA Bank Account means a separate bank account to be maintained by a promoter in the scheduled bank in the local branch where the project is going on. In-State of Karnataka, according to section 4(2) (I) (D) of Act covers the land cost of the project and the cost of construction. The promoter can [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":12118,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[182],"tags":[727],"acf":{"service_id":"102"},"authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/0.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":7603,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12114"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=12114"}],"version-history":[{"count":11,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12114\/revisions"}],"predecessor-version":[{"id":12127,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/12114\/revisions\/12127"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/12118"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=12114"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=12114"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=12114"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}