Noida Authority asks developers to open escrow accounts of delayed projects by August 26 or face action

Noida : The CEO also directed officials that information regarding the dues against each developer should be published in newspapers and that boards should be installed at the project site mentioning their liability towards the authority.
Taking a serious note of non-compliance with its earlier directions and suspected diversion of funds by builders from delayed under-construction projects, the Noida Authority has asked over 50 developers to open escrow accounts for each delayed project by August 26. Failure to do so would attract penal action, officials aware of the matter said.
The Noida Authority, the body in charge of developing and maintaining the Delhi satellite city, had in June this year issued directions regarding the opening of escrow accounts—to be jointly managed by the developer and the authority—for delayed projects but just a handful has complied so far.
“Only six developers have opened escrow accounts of their projects. Seeing non-compliance with this mandatory exercise, Noida Authority CEO Lokesh M last week convened a meeting of real estate developers and warned them of strict action if they do not open escrow accounts for each of their projects by August 26, 2023,” a Noida Authority official told Moneycontrol.
Around 59 promoters in Noida had been told to open escrow accounts. The authority also aims to recover non-litigated builder dues amounting to over Rs 7,000 crore by adopting the escrow account mechanism. So far, only six promoters have opened escrow accounts in the delayed projects.
Authority officials said that the move is aimed at discouraging misuse of funds by the builder, ensuring transparency and realise dues. This scheme was started in 2018 but it could not be effectively implemented.