Introduction

NHB full form is National Housing Bank, an autonomous organisation focused on promoting Housing Finance organisations across the nation for both provincial and global housing infrastructure development, and making available funding requirements of these Establishments through onward refinancing or offering an assurance to such Institutes for raising funds.

It is the primary agency in charge of promoting housing finance institutions at the regional and municipal levels and assisting them financially and otherwise.

Table of content

  1. History
  2. Board of directors 
  3. Objectives of NHB
  4. Criteria for Receiving a Refinance from the National Housing Bank
  5. NHB Advantages
  6. The NHB’s powers: after 2019
  7. Conclusion
  8. FAQs

History

India’s Prime Minister announced the establishment of the National Housing Bank as an apex-level organisation for housing finance when proposing the Union Budget for 1987-88. Following that, in the winter session of 1987, Parliament enacted the National Housing Bank Bill, which created the statutory basis for the founding of NHB, and it became an Act of Parliament with the President’s assent on December 23, 1987.

 It took the position of the Agricultural Credit Department, the Reserve Bank of India’s Rural Planning and Credit Cell, and the Agricultural Refinance and Development Corporation. The NHB’s basic functions are described in the Preamble of the National Housing Bank Act of 1987 as “operating as a principal agency to promote housing finance organisations both at the local and regional levels and provide financial and other support to such institutions and for matters related to it.” 

The following are some of the significant businesses described for NHB is allowed to conduct, claims section 14 of the NHB Act:

  •  Encouraging, establishing, supporting, or assisting in developing, supporting, and promoting housing finance organisations.
  •  Providing housing finance organisations and scheduled banks with loans and advances and any other type of financial support.
  •  Developing one or more schemes to mobilise resources and extend housing loans.
  • Guaranteeing home finance institutions’ financial commitments and underwriting the issuance of stocks, shares, and securities of all types of housing finance institutions.
  • Developing one or more plans for the economically disadvantaged could be subsidised by the federal government, state governments, or other sources.

Board of directors

The Board of Directors shall have overall supervision, direction, and management of the National Housing Bank’s activities and business. It shall exercise all powers and perform all acts and things that the National Housing Bank may exercise or perform.

  1. Sarada Kumar Hota; the Managing Director
  2. R. Gandhi; Deputy Governor
  3. Pankaj Jain, IAS; Secretary to the Government of India, Ministry of Finance.
  4. Rajiv Ranjan Mishra, IAS; Joint Secretary, Minister of Urban Poverty Alleviation, Government of India.
  5. Malay Shrivastava, IAS; Secretary, Government of Madhya Pradesh, Urban Development and Environment Department 
  6. Sadakant, IAS Principal Secretary; Uttar Pradesh Government’s Housing and Urban Planning Department.

Objectives of NHB

  •  To encourage the development of a network of specialised housing finance institutions that can appropriately serve various regions and income categories.
  •  Encourage public entities to become facilitators and providers of housing-ready land.
  • To make credit for housing more accessible.
  •  To use the Act’s regulatory and supervisory authorities to regulate the activities of home financing firms.
  • To increase the sector’s resources and redirect them into housing
  • Encourage the expansion of the supply of buildable land and building supplies for housing and the upgrading of the country’s housing stock.

Criteria for Receiving a Refinance from the National Housing Bank

  • The home financing firm must have a share capital of at least Rs. Three crores and a promoter contribution of at least 25% of the total capital.
  • It can’t be a construction company’s subsidiary.
  • It must be a public limited corporation.
  • Long-term financing for the development or purchase of a home for personal use must account for at least 75% of all loans.
  • The promoters’ Construction Company should not have the same senior management as the Housing Finance Company.

NHB Advantages

  •     A dedicated organisation concentrates on home finance infrastructure, making refinancing choices simple to get.
  •         Provides experience in the area of home finance underwriting.
  •         It guarantees for housing finance enterprises that cannot raise financing on the open market.
  •         Assists in the development of the making of new homes.

The NHB’s powers: after 2019

In India, there are now 97 registered home finance companies. In its new function, the NHB retains the authority to inspect and penalise HFCs in their capacity as supervisors.

In addition, the NHB continues to refinance HFCs and publishes its home price index. It also serves as a pioneer in the Indian housing sector by promoting novel finance solutions such as reverse mortgages.

Conclusion

The National Housing Bank is helping to meet the government’s current affordable housing goal by providing much-needed funding at low rates to housing finance firms and other cooperative organisations working on housing infrastructure.

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