Make Escrow account essential in realty: Assocham
A white paper from the Associated Chambers of Commerce and Industry of India (Assocham) has emphasised that opening an Escrow account should be made mandatory for real estate developers to ensure transparency in real estate transactions. Appointment of a Real Estate Regulator shouldn’t be delayed, said Sajjan Jindal, president of Assocham.
The Assocham has also demanded that real estate developers and all concerned stakeholders including consumers completely adhere to credit policies and norms communicated by RBI and National Housing Bank. The white paper already submitted to the government also highlights the need for appointing a real estate regulator to ensure that consumer grievances are addressed without any further delay.
According to Assocham, real estate developers should be asked to open up Escrow account so that complete transparency is maintained and real estate industry returns on rails because of demand factors.
The real estate sector, however, is likely to take serious objections to this recommendation. Although nobody is ready to speak against it openly as yet, a senior official with a leading developer from Mumbai – on conditions of anonymity – said that this was a ploy from Mr Jindal to take away the attention from the steel industry’s planned increase in prices. "Will he agree for a similar regulation in the steel industry? I don’t think so. He is certainly not the right person to talk about the real estate sector," said this official.
He said that such a step would take back the industry to the dreaded license raj era. According to this official, banks and financial institutions already have a similar clause and there was no need for this drastic measure.
Construction Week India has also learnt reliably that apex real estate body Credai is likely to take up this issue strongly very soon. Credai will also be seeking support from other industry bodies like CII & FICCI.