Under the Real Estate (Regulation and Development) Act (RERA), which came fully into effect from May 2017, what percentage of the funds collected from home buyers must be deposited by the builder in a separate bank account for that specific real estate project?

Introduction / Context:
The Real Estate (Regulation and Development) Act, commonly called RERA, was enacted to bring transparency, accountability and consumer protection into the real estate sector. One of its most important provisions is that builders must keep a substantial portion of the funds collected from buyers in a dedicated bank account, ensuring that money raised for a project is actually used for that project. This question tests whether you remember the exact percentage that must be deposited, which is a frequently asked fact in exams related to economics, current affairs and Indian polity.

Given Data / Assumptions:

The question explicitly mentions that the Real Estate Act has come into effect from May 2017.
It asks about the percentage of funds collected from buyers that must be deposited in a separate bank account linked to the same project.
The purpose of this requirement is to prevent diversion of funds to other projects or uses.
Only one of the given percentages (50%, 40%, 70%, 80%) matches the actual statutory requirement.

Concept / Approach:
RERA requires real estate promoters to deposit a fixed percentage of the amounts realised from allottees from time to time in a separate bank account. This money must be used only to cover the cost of construction and the land cost of that particular project. The standard figure you must remember is 70 percent. The approach is straightforward factual recall: if you know RERA's core requirement is 70%, you can immediately choose that option. If you are unsure, you might try to reason that the law demands a high proportion but not necessarily the entire amount, making 70% the most plausible among the given options.

Step-by-Step Solution:
Step 1: Recall the main consumer-protection features of RERA, such as compulsory project registration, disclosure norms and restrictions on use of buyer funds. Step 2: Focus on the specific rule that promoters must keep a large portion of the amount received from allottees in a separate bank account. Step 3: Remember that the Act fixes this portion at 70 percent of the amounts realised for the real estate project from the allottees, to be used only for that project. Step 4: Compare this with the options: 50%, 40%, 70% and 80%. The figure 70% exactly matches the legal requirement. Step 5: Therefore, 70% is the correct answer.

Verification / Alternative check:
You can verify this by recalling how RERA is often summarised in exam notes: “Promoter must deposit 70% of the amount realised from allottees in a separate bank account.” Various government FAQs, newspaper articles and coaching materials emphasise this 70% rule repeatedly because it is a key consumer-safety provision. Other percentages like 50% or 80% are not mentioned as statutory thresholds in this context, confirming that 70% is the correct value to remember.

Why Other Options Are Wrong:
50%: While half the funds in a dedicated account might still offer some protection, RERA specifically mandates a higher threshold to ensure stronger financial discipline. Fifty percent is not what the Act prescribes. 40%: This figure is too low to guarantee that most of the buyers' money is safeguarded for the specific project. It does not match the wording of the law. 80%: Although 80% might sound even safer from a consumer perspective, the Act balances developer liquidity and consumer security at 70%. Eighty percent is not the figure written into the statute.

Common Pitfalls:
Candidates often confuse the exact percentage and choose 50% or 80% because they sound like neat fractions. Some aspirants also mix up numbers from other schemes or regulations, such as bank reserve requirements or different sectoral norms. To avoid this, always link the number 70% with RERA's project account rule in your memory, perhaps by using a mnemonic like “RERA saves 70 for buyers.” Making such associations helps you recall the correct percentage quickly in exams.

Final Answer:
Under RERA, promoters must deposit 70% of the amounts collected from home buyers in a separate bank account dedicated to that specific real estate project.