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The National Housing Bank was established under the National Housing Bank Act, 1987 and started its operations on 9 th July, 1988. Its purpose was to function as an apex body to promote viable and cost effective Housing Finance Institutions (HFI) and to provide financial and other support to them.
OBJECTIVES
The primary objective of the National Housing Bank is to encourage the growth of a sound network of HFIs that adequately serve various regions, different income groups and cater to all segments of population. To achieve this aim National Housing Bank is empowered to make available loans and advances to Scheduled Banks, HFIs or to any body established by or under a Central, State or Provincial Act. NHB can also issue directions to HFIs to advance their healthy growth.
Its other objectives include augmenting resources and canalizing them for the housing sector, making available affordable credit for housing and encouraging the increase in supply of build able land and building material for housing and for upgrading the housing stock in India.
ACTIVITIES
NHB launched the ‘Swarna Jayanti Rural Housing Finance Scheme’ to improve the accessibility of housing loans to rural borrowers for construction, acquisition or up-gradation of their house in rural areas of the country.
As the principle agency in the housing finance sector, NHB is playing a lead role in mortgage-backed securitization and in developing the secondary mortgage market in India . It has been entrusted with the responsibility of launching Mortgage Credit Guarantee Scheme with the twin purpose of providing affordable and accessible credit to borrowers and protecting the lenders against default.
National Housing Bank also provides re-financing facilities to those HFIs which are registered with it and have minimum net owned funds of Rs. 10 crores. It grants Certificate of Registration to companies so they can carry out the business of financing houses. It runs a Training Division that helps workers in the housing finance and housing areas to hone their management capabilities.
RESOURCES
For carrying out all these functions NHB sources its financial resources both from domestic and external issue of Bonds\debentures, borrowings from RBI and financial institutions.
NHB has played a stellar role in the growth of housing sector in India ; with close coordination with RBI and the Indian Government it can ensure the upkeep and feasibility of its housing projects in India .
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