National Housing Bank
- The National Housing Bank (NHB), a Government of India-owned business, was established on July 9, 1988, under the National Housing Bank Act of 1987. NHB is the leading housing-related financial institution. NHB was founded with the goal of serving as the primary agency for promoting housing finance institutions at both the local and regional levels, as well as providing financial and other assistance to such institutions and related concerns. The Finance Act of 2019 revised the National Housing Bank Act of 1987. The amendment empowers the Reserve Bank of India to regulate Housing Finance Companies (HFCs).
- The NHB registers and oversees Housing Finance Companies (HFCs), monitors them using on-site and off-site mechanisms, and coordinates with other regulators.
- Objectives
- NHB was founded to fulfill the following inter-Alia objectives:
- To promote a solid, healthy, viable, and cost-effective housing finance system that serves all sectors of the population, as well as to integrate the housing finance system into the entire financial system.
- To establish a network of specialist housing financing institutions that can appropriately service diverse locations and income categories.
- To increase resources for the sector and direct them toward housing.
- Make housing credit more affordable.
- To control the operations of home financing firms utilizing regulatory and supervisory power resulting from the Act.
- To stimulate an increase in the availability of buildable land and construction materials for housing, as well as to modernize the country’s housing stock.
- Encourage governmental entities to emerge as facilitators and providers of serviced land for housing.
- Functions:
- One of the most essential and primary duties of this top Institute is to regulate and supervise housing companies functioning in India; its powers are drawn from the National Housing Bank Act.
- Raising funds on a wide scale and refinancing to Housing Finance companies, Cooperative Banks, and other housing organizations for onward lending to Individual and Infrastructure firms in the housing sector.
- Ensure that housing finance companies satisfy the regulatory capital requirements outlined in BASEL regulations, have a robust risk management structure in place, and use appropriate governance procedures.
- Role of the National Housing Bank
- The National Housing Bank was founded in 1988 with a particular objective in mind. Its main function and aims are listed below:
- The primary goal is to secure appropriate funding for housing infrastructure development, as well as a continuous supply of money to different Housing Finance Institutes to assure timely lending to various income segments (lower, middle, and higher-income groups).
- Another important goal behind the establishment of this apex Institute is to ensure proper regulation and supervision of Housing Finance Companies operating in the country, timely auditing of them, ensuring their compliance with relevant guidelines, and ensuring that credit is made available by such organizations at affordable rates in order to achieve the goal of housing for all.
- Another significant function that National Housing Bank performs is to increase the number of housing units in the nation. To accomplish this goal, NHB plays an important role in making land accessible for housing development by serving as a facilitator, providing methods and means for enterprises in the housing sector to acquire financing, and smoothing the overall function to increase efficiency and productivity.