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Union of India - Section
Section 18 in The National Housing Bank Act, 1987
18.
/800Statement of Objects and Reasons.-Housing is a basic need and serves to fulfil the fundamental objective of providing shelter. The existing institutional framework for providing housing finance is yet to develop fully. It is, therefore, necessary to create a housing finance structure through establishment of appropriate institutions at various levels which would mobilise resources and promote housing activity.2. A high level group which looked into the problem, recommended that a National Housing Bank be established as an apex housing financial institution to function as the principal agency for the promotion of housing finance institutions at various levels, to co-ordinate the activities of these institutions, to promote mobilisation of resources for housing and to extend financial support to the housing finance institutions.3. The Bill seeks to provide for the establishment of a National Housing Bank with a view to give effect to the aforementioned recommendations of the high level group. In addition, the National Housing Bank will also play a role in the formulation of policies designed to promote housing in the country and provide guide-lines for the working of all the agencies connected with housing.4. The Notes on Clauses appended to the Bill explain the provisions of the Bill.Amendment Act 15 of 2000-Statement of Objects and Reasons.-The National Housing Bank was established in July, 1988 under the National Housing Bank Act, 1987 to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions and for matters connected therewith or incidental thereto. To meet the objectives aforesaid, the National Housing Bank was also conferred powers to regulate the deposit acceptance activities of the housing finance institutions similar to those available to Reserve Bank of India in respect of non-banking financial companies. The powers of the Reserve Bank of India to control the activities of non-banking financial companies were further strengthened by the Reserve Bank of India (Amendment) Act, 1997. The housing finance companies which are sub-set of non-banking financial companies were exempted from the provisions of the Reserve Bank of India Act, as amended in 1997, for the reason that such companies fall under the regulatory frame work of the National Housing Bank. Thus, there arose the necessity to confer powers on the National Housing Bank similar to those available to the Reserve Bank of India after the above amendment. These proposed provisions will enable the National Housing Bank to safeguard the interest of depositors and promote healthy and universal growth of housing finance companies in the country.2. Housing loans are generally of long term duration and consequently the funds of housing finance institutions get locked up in mortgages. There is need to augment their capacity to provide more finance by adopting asset securitisation and development of a secondary mortgage market in the country. The National Housing Bank, being the principal agency in the field of housing finance, is being entrusted with the responsibility to develop such market in housing mortgages in the country.3. There has been a long standing demand from the housing finance institutions for a speedier method of recovery of dues from the defaulting borrowers. It is prop -sed to provide for a simple, speedy and cost effective method of recovery of overdues by the housing finance institutions by providing for the sale of property charged as security for the assistance granted by such institutions through recovery officers. A provision is also being made for establishment of Appellate Tribunal to hear appeal against the decision of recovery officer.4. With the introduction of economic reforms, it has been considered necessary to enlarge the capital and shareholder's base of the National Housing Bank. Consequently, it is proposed to provide for enhancement of the authorised capital of the National Housing Bank to rupees three hundred fifty crores with an enabling provision for further increase up to rupees two thousand crores. It is also proposed that the National Housing Bank may offer its shareholding to institutions, besides the Reserve Bank of India, in such manner that the Reserve Bank of India, the Central Government, public sector banks, public financial institutions or other institutions owned or controlled by the Central Government, shall in aggregate at any time hold not less than fifty-one per cent. of the issued capital of the National Housing Bank. It is also proposed to provide for restructuring of the Board of Director of the National Housing Bank.5. In the light of the experience gained in the operations of the National Housing Bank since its establishment, it is felt necessary to bring certain amendments to the said Act for the smooth working of the National Housing Bank and to authorise it to undertake certain additional business of financing of agricultural and rural development banks, making of loans and advances for residential township-cum-housing development projects, undertaking securitisation of loans, setting up of mutual fund and undertaking or participating in housing mortgage insurance business.6. The Bill seeks to achieve the aforesaid object.[23rd December, 1987]An Act to establish a bank to be known as the National Housing Bank to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions and for matters connected therewith or incidental thereto.Be it enacted by Parliament in the Thirty-eighth Year of the Republic of India as follows:-| The whole Act except Chapter V and Section 49(3) was brought into force on 9.7.1988 vide S.O. 684(E), dated 9.7.1988. Chapter V and Section 49(3) came into force on 1.6.1989 vide S.O. 394(E), dated 1.6.1989. |