Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →
Payment aggregator nodal accounts (T+1/T+2 merchant settlement) and RERA 70% escrow accounts are regulator-reviewed. Nodal balance above the unsettled obligation is commingling; below it is a settlement failure. RERA withdrawals without architect certification breach Section 4(2)(l)(D).
Run daily nodal reconciliation where nodal balance equals sum of collected-but-unsettled buyer transactions. For RERA escrow, match every deposit (70% of each flat payment) and every withdrawal (against architect certificates and approved project expenses) to the RERA portal's registered escrow balance.
Nodal buyer-to-merchant ledger, T+1 and T+2 settlement SLA, RERA 70% deposit rule, withdrawal approval workflow tied to architect certificates, and interest income split (Section 194A TDS).
Regulator-ready audit trail for RBI payment aggregator reviews and RERA authority queries, daily nodal balance confirmation, and a withdrawal register that survives project audit.
A marketplace platform processes ₹18 crore per day in buyer transactions through its nodal account. By T+1, approximately ₹16 crore must be settled to 2,400 sellers. The remaining ₹2 crore represents same-day transactions still within the settlement cycle.
The nodal account reconciliation must confirm, every day, that the account balance equals the outstanding settlement obligation — not ₹1 crore more (excess funds that are a compliance risk) and not ₹1 crore less (insufficient funds that prevent settlement).
RBI Nodal Account Requirements for Payment Aggregators
The Reserve Bank of India’s Master Direction on Payment Aggregators and Payment Gateways requires:
| Requirement | Specification |
|---|---|
| Account type | Dedicated nodal account with scheduled commercial bank |
| Fund commingling | Prohibited — no PA own funds in nodal account |
| Settlement timeline (small merchants) | T+1 from transaction date |
| Settlement timeline (standard merchants) | T+2 from transaction date |
| Reporting | Monthly to RBI — balance and settlement performance |
| Reconciliation | Daily balance reconciliation mandatory |
The nodal account must hold exactly the amount needed to settle outstanding merchant obligations. If the balance is higher, the excess must be swept out to the PA’s own account. If lower, the PA must fund the deficit.
Nodal Account Daily Reconciliation
The Daily Reconciliation Equation
Opening nodal balance
+ Collections from buyers (today)
− Merchant settlements (today)
= Closing nodal balance
Closing nodal balance should equal:
= Unsettled T+1 obligations (today's collections, settle tomorrow)
+ Unsettled T+2 obligations (yesterday's collections if on T+2 terms)
− Any float adjustments (refunds, chargebacks in progress)Any variance between the actual closing balance and the calculated obligation amount requires same-day investigation.
Transaction-Level Reconciliation
At the transaction level, every buyer payment must be tracked from:
- Collection: Buyer payment received — tagged to merchant, transaction ID, timestamp
- Pending settlement: Enters the settlement queue
- Settlement instruction sent: Payout instruction sent to bank for T+1 or T+2 delivery
- Settlement confirmed: Bank confirms the merchant received the funds
- Closed: Transaction is fully settled
Transactions that do not progress through this lifecycle within the prescribed timeline are settlement failures — must be escalated immediately.
RERA Escrow Reconciliation
Deposit Compliance
For every flat or unit sold, 70% of the amount received must be deposited in the RERA escrow within a defined timeframe (typically within 7 days of receipt per state RERA rules). The RERA escrow reconciliation tracks:
- Booking amount: Paid at booking — 70% to escrow, 30% to developer’s operating account
- Instalment payments: Each instalment — 70% portion to escrow
- Last payment (possession): 70% to escrow until occupation certificate is received
| Payment event | Amount | 70% to escrow | 30% to developer |
|---|---|---|---|
| Booking amount | ₹5,00,000 | ₹3,50,000 | ₹1,50,000 |
| First instalment | ₹10,00,000 | ₹7,00,000 | ₹3,00,000 |
| Second instalment | ₹10,00,000 | ₹7,00,000 | ₹3,00,000 |
The RERA authority’s portal maintains the registered escrow balance. The developer’s finance team must reconcile the physical escrow bank account balance to the RERA portal balance monthly.
Withdrawal Compliance
RERA withdrawals require:
- Application to the RERA authority with documentary evidence (architect certificate, invoices)
- RERA authority approval
- Bank debit from escrow
- Post-withdrawal reconciliation: portal balance updated, bank balance updated, withdrawal linked to the supporting documentation
Unauthorised withdrawals — debits from the escrow without RERA authority approval — are a criminal offence under RERA. The reconciliation must flag any bank debit from the escrow account that does not have a corresponding RERA withdrawal approval.
Escrow vs Nodal: Key Differences for Reconciliation
| Dimension | Nodal account | RERA escrow |
|---|---|---|
| Regulator | RBI | State RERA authority |
| Reconciliation frequency | Daily (mandatory) | Monthly (minimum) |
| External reporting | Monthly to RBI | Transaction-level to RERA portal |
| Withdrawal rules | Settlements to merchants per timeline | RERA certificate required |
| Excess funds | Must be swept to operating account | Must remain until occupation certificate |
| Audit | RBI inspection | RERA audit |
Financial Escrow for Transactions
Beyond RERA, financial escrow is used in M&A transactions, commercial real estate deals, and milestone-based contracts. The escrow holds funds on behalf of two parties and releases them upon fulfillment of agreed conditions.
Financial escrow reconciliation tracks:
- Amounts deposited by each party
- Conditions met (with evidence)
- Releases to the appropriate party
- Outstanding balance and any dispute holds
The escrow bank account is held in the name of the escrow agent (typically a bank or legal entity) — not the company itself. The company’s books show a receivable from the escrow, not a bank balance. This distinction is important for cash position reporting.
Reconciliation software India that handles both the daily balance-vs-obligation reconciliation for nodal accounts and the deposit/withdrawal tracking for RERA escrow accounts provides a single system for regulatory-grade fund flow reconciliation.
Bank reconciliation software with escrow account support — producing the bank balance vs portal balance reconciliation and the withdrawal documentation trail — prepares the audit evidence that RERA authorities and RBI inspectors require.
The Reserve Bank of India publishes the Master Direction on Payment Aggregators and Payment Gateways — which specifies the nodal account requirements, settlement timelines, and reporting obligations for licensed payment intermediaries.