Last modified at 03/06/2016 10:44 by System Account

National Housing Bank (NHB)

The National Housing Bank (NHB) has been set up under the National Housing Bank Act, 1987 with the basic functions described as –

“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 ”

In terms of the National Housing Bank Act, 1987, National Housing Bank is expected, in the public interest, to regulate the housing finance system of the country to its advantage or to prevent the affairs of any housing finance institution being conducted in a manner detrimental to the interest of the depositors or in a manner prejudicial to the interest of the housing finance institutions. 

The expression public deposit has been defined in detail in clause (w) of sub-paragraph (1) of paragraph 2 of The Housing Finance Companies (NHB) Directions, 2001However, the definition of public deposit specifically excludes certain deposits like amount received from Central or State Governments, banks, publis financial institutions and other institutions, from other companies, mutual funds etc.

For acceptance of public deposits Housing Finance Companies (HFCs) can be divided into two categories, i.e. HFCs carrying on the business of housing finance before June 12, 2000 and HFCs commencing housing finance business after that date.

(a)  Companies carrying on business of housing finance before June 12, 2000 can accept deposits provided they have NOF of over rupees twenty five lacs and have applied for certificate of registration with NHB before December 12, 2000 and either have been granted the certificate of registration valid for acceptance of deposits by NHB or their application is still pending for issue of certificate of registration  with NHB.

(b) Companies commencing the business of housing finance after June 12, 2000 can accept public deposits only after:

(i) obtaining certificate of registration from NHB valid for acceptance of deposits; and

(ii) having minimum net owned funds (NOF) of [rupees two crores or more]*. 

*this amount was rupees twenty five lacs or more for HFCs which commenced business before February 16, 2002.

For more information, please visit http://nhb.org.in/



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