When it comes to the development of the housing sector in India, the National Housing Bank (NHB) plays a crucial role. Established in 1988, NHB is a wholly-owned subsidiary of the Reserve Bank of India (RBI). It was set up with the objective of promoting housing finance institutions and providing financial support to them.
The Genesis of National Housing Bank
The idea of creating a dedicated institution for housing finance in India was first proposed in 1986 by the then Prime Minister, Rajiv Gandhi. The proposal was accepted, and the National Housing Bank was established under the National Housing Bank Act, 1987.
The primary objective of NHB was to promote the development of the housing finance sector and provide long-term finance to housing finance institutions. It was also tasked with regulating and supervising housing finance companies in the country.
The Role of National Housing Bank
NHB plays a vital role in the development of the housing sector in India. It provides refinance facilities to housing finance companies, which, in turn, provide loans to individuals for the construction or purchase of a house.
NHB also promotes research and development in the housing sector and provides technical assistance to housing finance institutions. The bank also plays a significant role in the development of affordable housing in the country.
Regulatory Functions of National Housing Bank
NHB is responsible for regulating and supervising housing finance companies in India. It ensures that these companies adhere to the rules and regulations set by the bank and the government.
The bank also has the power to inspect housing finance companies and take action against those that violate the rules. NHB can cancel the registration of a housing finance company if it fails to comply with the regulations.
Financial Assistance provided by National Housing Bank
NHB provides financial assistance to housing finance companies in the form of refinance. The bank offers refinance facilities to both public and private sector housing finance companies.
The refinance is provided for various purposes, such as the construction of houses, the purchase of land for housing development, and the renovation of existing houses. The bank also provides long-term finance to housing finance companies for the development of affordable housing projects.
Initiatives taken by National Housing Bank
NHB has taken several initiatives to promote affordable housing in the country. The bank has launched the Affordable Housing Fund (AHF) to provide long-term finance to housing finance companies for the development of affordable housing projects.
The bank has also introduced the Credit Risk Guarantee Fund Trust for Low-Income Housing (CRGFTLIH) to provide credit risk guarantee to housing finance companies for loans given to individuals from economically weaker sections (EWS) and low-income groups (LIG).
Impact of National Housing Bank on the Housing Sector
The National Housing Bank has played a significant role in the development of the housing sector in India. The bank has provided financial assistance to housing finance companies, which has helped in the growth of the housing finance sector in the country.
The bank has also introduced several initiatives to promote affordable housing, which has helped in bridging the gap between demand and supply of housing in the country. The initiatives have also helped in making housing more accessible and affordable to the masses.
Conclusion
The National Housing Bank is a crucial institution for the development of the housing sector in India. The bank has played a vital role in providing financial support to housing finance companies and promoting affordable housing in the country.
The bank???s initiatives have helped in making housing more accessible and affordable to the masses, which is crucial for the growth and development of the country.
