The Tamil Nadu Real Estate Regulatory Authority (TNRERA) has issued a fresh compliance directive mandating promoters to maintain three separate bank accounts for each registered real estate project, effective January 1, 2026. The move is aimed at improving financial transparency and strengthening safeguards for homebuyers by ensuring stricter monitoring of project funds.
According to the order issued on December 12, 2025, all real estate projects registered or re-submitted from January 1, 2026 onwards must open three project-specific accounts with the same scheduled bank and branch. Entire collections from homebuyers must first be deposited into a designated Collection Account. Direct withdrawals from this account are not permitted; instead, the funds will be automatically transferred through an end-of-day sweep mechanism.
Seventy per cent of the collected amount will be credited to a Separate Account, which can be used only for land acquisition, construction, and development expenses. Withdrawals from this account will be allowed only after certification from the project’s architect, engineer, and chartered accountant, confirming progress in line with regulatory norms. This mechanism aligns with broader RERA compliance requirements that buyers are advised to verify during the purchase process, as outlined in the Ultimate 100-Point India Apartment Buying Checklist.
The remaining 30 per cent will be transferred to a Transaction Account, which may include promoter funds and project loans. This account can be used for permissible project-related expenditures such as marketing costs, administrative expenses, interest payments, penalties, and refunds up to the prescribed limit. By clearly segregating funds, the authority seeks to address concerns around cost opacity and fund diversion—issues that often impact the true cost of buying an apartment in India.
TNRERA noted that the absence of controls at the collection stage had previously created regulatory gaps, allowing funds to be moved across projects. The introduction of a structured three-account system is expected to improve traceability and accountability throughout the project lifecycle.
The updated banking framework reinforces the objectives of the Real Estate (Regulation and Development) Act, 2016, which focuses on transparency, financial discipline, and protection of homebuyer interests. Developers registering projects in Tamil Nadu from 2026 will be required to strictly adhere to the revised banking norms.
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