Escrow Banking

Real Estate Escrow Platform Built for Compliance, Control, & Trust

Castler’s RERA-compliant Real Estate Escrow platform helps developers, PropTechs, and regulators manage funds with transparency and control. It allows for milestone-based disbursals, real-time tracking, and digital onboarding. This ensures faster execution, meets regulatory requirements, and builds complete buyer confidence in every real estate project.

Purpose-bound fundsMulti-bank visibilityRule-based settlements

Talk to an escrow specialist Explore Escrow Banking

Neutral control

Funds remain governed by agreed release conditions

Bank-connected

Escrow operations stay visible across the banking workflow

Audit-ready

Every movement retains a clear operational trail

THE USE CASE

A controlled escrow operating model

Castler’s RERA-compliant escrow platform automates fund flows with milestone-based disbursals and real-time visibility—driving compliance, speed, and buyer trust.

Why Real Estate Needs Escrow-Led Trust

Real estate fraud in India is a significant concern, with various scams affecting numerous individuals, several common fraudulent practices have been identified:

Involves forging property documents to falsely claim ownership. Victims may unknowingly purchase properties with fraudulent titles, leading to legal disputes and financial losses.

Builders or sellers provide false information about a property, such as its specifications or legal approvals, misleading buyers into unfavorable deals

Delayed Possession

Builders delay handing over properties beyond the agreed timeline, causing financial strain to buyers who may be paying both rent and home loan EMIs.

Unauthorized Sales

Properties are sold without proper authorization or necessary approvals, leading to legal complications for unsuspecting buyers.

What is Real estate escrow ?

Real estate escrow is a safe financial transaction in which a third-party agent-usually a bank or escrow site-holds funds and documents on behalf of developers and buyers pending certain contractual conditions. In the Indian scenario, particularly under RERA (Real Estate Regulation and Development Act), escrow accounts are required to ensure that funds in projects are utilized solely for their respective purposes. Escrow protects buyers by releasing payments to builders only upon achievement of the stages of construction and verification. With digital escrow solutions such as Castler, the whole process, from account creation and agreement verification to payment release and reporting, can be automated, tracked, and compliant all the way, eliminating fraud, delays, and money disputes.

Why Escrow Services for Real Estate?

Ensures Compliance with Terms

Escrow ensures that the agreed-upon terms-such as property inspections, repairs, or title transfers—are fulfilled before the funds are released, providing security for both parties.

Secure Handling of Funds

Real estate transactions typically involve large sums of money. Escrow securely holds these funds until all parties have met the necessary conditions, reducing the risk of financial mismanagement or disputes.

Confidence for All Parties

When the Funds are kept in escrow then the cashflow of the project can be Monitored. As Realtor/Builder can only use Fraction of the amount out of the collections from buyers, Then Buyer will also have a confidence on that their Money is kept safe and in case of delayed delivery and Project non-completion, Buyers have a surety of their money being safe in the escrow account.

RERA guidelines for Escrow Account

1. Mandatory Escrow Accounts

Mandatory Escrow Accounts

All the collections received from the Real estate buyers need to be deposited in a ratio of 70:30 where 70% of funds received from homebuyers into a dedicated escrow account which is RERA Designated account. This account is exclusively for covering land acquisition and construction costs of the specific project.

The remaining 30% of the funds can be used for Constructions & operating expenses of the projects

2. Funds Restricted for Project Use

Funds Restricted for Project Use

Funds deposited in the escrow account are strictly for construction and development of the designated project.

Diversion of funds to other projects or personal use is strictly prohibited .

3. Withdrawal Based on Progress

Withdrawal Based on Progress

Developers can withdraw funds only in proportion to the project completion stage . Withdrawals must be certified by:

- An architect or engineer verifying project progress.

- A chartered accountant confirms that withdrawals align with work completed.

4. Annual Auditing for Transparency

Annual Auditing for Transparency

The escrow account must be audited annually by a certified chartered accountant within six months of the financial year’s end.

This ensures compliance with RERA provisions and provides transparency in fund utilization.

5. Misuse Prevention

Funds collected for one project cannot be used for another.

The escrow system safeguards homebuyers' money and ensures every rupee contributes to the designated project.

6. Strict Penalties for Non-Compliance

Strict Penalties for Non-Compliance

Non-compliance with escrow provisions can result in:

- Fines of up to 10% of the project’s estimated cost .

- In severe cases, imprisonment of the developer.

7. Homebuyer Protection

The escrow system enhances confidence by ensuring homebuyers’ funds are used exclusively for project completion.

It promotes transparency and accountability, reducing financial risks for buyers.

Castler can help real estate owners (builders) to manage their escrow accounts for better transparency of funds, track the payment release status from the escrow account and for better reconciliation of accounts.

The Real Estate (Regulation and Development) Act, 2016 (RERA) is an Indianlaw aimed at increasing transparency, accountability, and efficiency in the real estate sector. It protects homebuyers' interests by regulating real estate developers and agents, ensuring timely project completion, and establishing a grievance redressal mechanism.