NATIONAL HOUSING BANK

  • National Housing Bank (NHB), a wholly owned subsidiary of Reserve Bank of India (RBI), was set up on 9 July 1988 under the National Housing Bank Act, 1987.
  • NHB is an 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.
  • NHB registers, regulates and supervises Housing Finance Company (HFCs), keeps surveillance through On-site & Off-site Mechanisms and co-ordinates with other Regulators.
  • The Sub-Group on Housing Finance for the Seventh Five Year Plan (1985–90) identified the non-availability of long-term finance to individual households on any significant scale as a major lacuna impeding progress of the housing sector and recommended the setting up of a national level institution.
  • The Committee of Secretaries considered’ the recommendation and set up the High Level Group under the Chairmanship of Dr. C. Rangarajan, the then Deputy Governor, RBI to examine the proposal and recommended the setting up of National Housing Bank as an autonomous housing finance institution. The recommendations of the High Level Group were accepted by the Government of India.
  • In 1987 it was announced to establish the National Housing Bank (NHB) as an apex level institution for housing finance. Following that, the National Housing Bank Bill, providing the legislative framework for the establishment of NHB was passed by Parliament in the winter session of 1987.
  • The National Housing Policy, 1988 envisaged the setting up of NHB as the Apex level institution for housing.
  • In pursuance of the above, NHB was set up on 9 July 1988 under the National Housing Bank Act, 1987. NHB is wholly owned by Reserve Bank of India, which contributed the entire paid-up capital. The general superintendence, direction and management of the affairs and business of NHB vest, under the Act, in a Board of Directors. The Head Office of NHB is at New Delhi.

 

 

Pradhan Mantri Awas Yojana- new guidelines by NHB:

 

Economically Weaker Section (EWS): EWS households are defined as households having an annual income up to Rs. 3,00,000 (Rupees Three Lakhs).

 

Low Income Group (LIG): LIG households are defined as households having an annual income between Rs.3,00,001 (Rupees Three Lakhs One) up to Rs.6,00,000 (Rupees Six Lakhs).

 

 

  • “Pradhan Mantri Awas Yojana (Urban) – Housing for All” Mission for urban area is being implemented during 2015-2022 and this Mission will provide central assistance to implemen ng agencies through States and UTs for providing houses to all eligible families/ bene ciaries by 2022.
  • Pradhan Mantri Awas Yojana (Urban) [PMAY (U)] – Housing for All Mission will be implemented as Centrally Sponsored Scheme (CSS) except for the component of credit linked subsidy which will be implemented as a Central Sector Scheme.
  • All Statutory Towns as per Census 2011 and towns no ed subsequently would be eligible for coverage under the Mission.
  • The houses constructed/acquired with central assistance under the Mission should be in the name of the female head of the household or in the joint name of the male head of the household and his wife, and only in cases when there is no adult female member in the family, the house can be in the name of male member of the household.
  • Beneficiaries of Economically Weaker sec on (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies and other such institutions would be eligible for an interest subsidy at the rate of 6.5 % for a tenure of 20 years. The Net present value will be calculated at a discount rate of 9%
  • The credit linked subsidy will be available only for loan amounts upto Rs 6 lakhs and additional loans beyond Rs. 6 lakhs, if any, will be at nonsubsidized rate.
Middle Income Group (MIG) – I: MIG – I households are de ned as households having an annual income between Rs.6,00,001 (Rupees Six Lakh One) up to Rs.12,00,000 (Rupees Twelve Lakh).
Middle Income Group (MIG) – II: MIG – II households are de ned as households having an annual income between Rs.12,00,001 (Rupees Twelve Lakh One) up to Rs.18,00,000 (Rupees Eighteen Lakh).

 

NHB RESIDEX

 

  • NHB RESIDEX, India’s first official housing price index, was an initiative of the National Housing Bank (NHB) undertaken at the behest of the Ministry of Finance, Government of India. The index was formulated under the guidance of a Technical Advisory Committee (TAC) comprising of stakeholders from the housing market. It was launched in July, 2007 and updated periodically till March 2015, taking 2007 as the base year. During this period, the coverage of NHB RESIDEX was expanded gradually to 26 cities.
  • Initially, NHB RESIDEX was computed using market data, which 2010 onwards, was shifted to valuation data received from banks and housing finance companies (HFCs).
  • Thereafter, data was sourced from Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) from 2013 to 2015.
  • With a view to make the NHB RESIDEX more current and up-to-date with the prevailing macro-economic scenario, NHB undertook a review of the processes and methodology used for computation of the index along with the base year and segmentation used.

 

Purpose of RESIDEX:

 

  • NHB RESIDEX is designed to track changes in housing prices at neighbourhood, city and national levels. Price changes will be measured over time and across cities and various locations within cities. NHB RESIDEX will help recognize current trends in micro as well as macro markets, and predict future behavior of the housing market. It will be of immediate use to banks, HFCs, developers, and home-buyers. The trends provided by NHB RESIDEX will be useful for credit evaluation processes undertaken by lenders. The assessment of present and potential property values will ensure stronger safeguards against financial lending. NHB RESIDEX will also provide developers a standardised tool to gauge housing demand within cities and across the country. Consumers, i.e. home buyers, will be able to check and compare prices before entering into a property transaction. NHB RESIDEX will also be of great use to policy makers and various research institutions.
  • Through NHB RESIDEX, policy makers can track inflation/deflation in housing prices. This knowledge can then be used to develop models for more effective revenue collection, and to design strategic changes in affordable housing schemes. NHB RESIDEX can be used to decipher a host of other macro trends, since housing is intimately linked to wider socio-economic factors.

 

Housing Price Indices (HPI):

  • The HPI represents the price changes in residential housing properties.
  • Under HPI, the four indices viz., [email protected] Prices, [email protected] Prices and [email protected] Prices for under-construction properties, [email protected] Prices for sale/resale properties use different sources to provide the entire spectrum of prevailing price at city and neighbourhood level.

 

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