NHB Role and functions

National Housing Bank (NHB), a Government of India owned entity, was set up on 9 July 1988 under the National Housing Bank Act, 1987. NHB is the apex financial institution for housing. NHB has been established with an objective to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support incidental to such institutions and for matters connected therewith. The Finance Act, 2019 has amended the National Housing Bank Act, 1987. The amendment confers the powers of regulation of Housing Finance Companies (HFCs) to the Reserve Bank of India.

NHB registers and supervises Housing Finance Companies (HFCs), keeps surveillance through On-site & Off-site Mechanisms and co-ordinates with other Regulators.

Objectives

NHB has been established to achieve, inter-Alia, the following objectives:

• To promote a sound, healthy, viable and cost-effective housing finance system to cater to all segments of the population and to integrate the housing finance system with the overall financial system.
• To promote a network of dedicated housing finance institutions to adequately serve various regions and different income groups.
• To augment resources for the sector and channelise them for housing.
• To make housing credit more affordable.
• To regulate the activities of housing finance companies based on regulatory and supervisory authority derived under the Act.
• To encourage augmentation of supply of buildable land and also building materials for housing and to upgrade the housing stock in the country.
• To encourage public agencies to emerge as facilitators and suppliers of serviced land, for housing.

Functions:

• Regulation and Supervision of Housing Companies operating in India is one of the most important and foremost functions of this apex Institute, powers of which are derived from the National Housing Bank Act.
• Raising of Funds on large scale and onward refinancing to Housing Finance companies, Cooperative Banks and other housing agencies for onward lending to Individual and Infrastructure companies in Housing Segment.
• Ensure Housing Finance Companies meet regulatory Capital requirements as required by BASEL norms, have proper risk management framework in place, good governance practices, etc.

Role of National Housing Bank

National Housing Bank has a specific role that is inherited with the purpose behind its formation in the year 1988. Its major role and objectives are enumerated below:

• The first and foremost objective is to ensure the availability of adequate financing for Housing Infrastructure development as well as a seamless flow of liquidity to various Housing finance Institutes to ensure timely financing to various Income segments (Lower, Middle and Higher-Income group).
• Another important objective behind creation of this apex Institute is to ensure proper regulation and supervision of Housing Finance Companies operating in the Country, timely audit of them, ensuring their compliance with the relevant guidelines as well as ensuring the credit is made available by such organization at affordable rates to meet the objective of housing for all.
• Another important role National Housing Bank plays is in increasing the number of housing units in the country. To achieve this objective NHB plays a pivotal role in making available land for building Housing by acting as facilitator, ways, and means to enable companies in the Housing segment to raise funds as well as smoothening the entire function to bring in more efficiency and enhanced productivity.