The National Housing Bank (NHB) is the agency that is involved in the promotion of housing finance institutions at both the regional and local levels. The secondary function of the NHB is to provide financial and other assistance to such institutions. The National Housing Bank Act (NHBA) of 1987 declared the NHB to be the prime banking agency for housing finance in 1988 July.
This article will discuss the National Housing Bank in the context of the IAS Exam.
The candidates can go through the relevant topics useful for their upcoming exams from the links provided below:
National Housing Bank (NHB)
- The NHB was previously an integral part of the Reserve Bank of India (RBI) until the Government of India purchased it in 2019 with the entire stake for INR 1,450 Crores. This step by the union was taken as per the Narasimha-II Committee Report of 2001.
- NHB primarily raises the required funds from bonds, borrowings, debentures, etc.
- As per the Bank Regulations Act, the bonds of the NHB are accepted as security in the commercial banks that can be used to meet the statutory liquidity.
- Moreover, the bonds can successfully seek external assistance from several international organisations, including USAID and OECF Japan. Another major component of the NHB is that it refinances Housing Finance Companies at varying rates depending on the size of the loan.
Objectives of the National Housing Bank
The following are some of the primary objectives of the NHB:
- To promote a feasible and cost-effective housing finance system for all segments of the population and to integrate housing finance with the other mechanics of finances.
- The most popular objective is to make house mortgages more affordable and bearable.
- The NHB aims toward the development of a network of housing finance that will be viable for people from almost all socioeconomic strata and scattered over a scattered region.
- NHB engages in increasing resources from various sectors and directs them towards housing finances.
- To exercise the right of supervision as dictated by the NHBA of 1987 on the activities of the housing finance institutions.
|
Indian Economy is a part of the UPSC Mains General Studies-III Syllabus. Take help of the following links to aid your economics preparations for different stages of the UPSC Exam: |
|---|
Functions of the National Housing Bank
- The primary function of NHB is to supervise and propel the housing companies in the country following the Act.
- Moreover, the NHB is also responsible for registering Housing Finance Companies.
- The NHB raises funds on a large scale and refinances the housing finance companies along with cooperative banks.
- These housing agencies further lend housing loans to individuals and housing infrastructure companies.
- The NHB ensures that all the housing finance companies under the Act follow the regulatory capital required as outlined in BASEL guidelines.
To read more about Basel III Norms, check the linked article.
The NHB RESIDEX
NHB, in July 2007, created the NHB RESIDEX, which is the first official housing price index in response to the Ministry of Finance, Government of India Directives. The Technical Advisory Committee (TAC), comprising housing stakeholders, assists the NHB RESIDEX. The NHB RESIDEX was previously evaluated in terms of the obtained market data, and later it followed the valuation data obtained from various HFCs and other housing institutions. Since 2007, the NHB RESIDEX went through regular updates until 2015. In these years, the main housing price index expanded over 26 cities present in the country. The NHB RESIDEX witnessed the most recent development in April 2018.
The NHB can be referred to as a self-governing agency whose primary goal is to encourage housing development. Promoting, fundraising, and surveilling the functions of various housing finance institutions are its extended functions. The NHB has prominent ties with eminent overseas housing organisations that directly influence the housing finance conditions of India.
Note: UPSC 2022 is approaching closer, supplement your preparation with the free UPSC Study Materials by BYJU’S.
Apart from this, to get the latest exam updates, study material, notes, and other relevant information, candidates can turn to BYJU’S for help and get expert assistance.
Frequently Asked Questions on National Housing Bank
When was National Housing Bank established?
The National Housing Bank (NHB) was established under the National Housing Bank Act of 1987 by the Government of India. Previously, NHB was considered a functional unit of RBI.
What is the role of NHB in housing finance in India?
NHB is the sole agency that works for the promotion of housing finance institutions in India. The NHB also provides financial and other support to financial institutions, including house loan banks and cooperative banks.
How did NHB RESIDEX come into play in the housing finance act of India?
The Ministry of Finance, the Government of India Directives, declared the first official housing price index in India named NHB RESIDEX. Presently, the NHB RESIDEX is spread over 26 different cities in the country and is still expanding.
Other related links:
Comments