Annual Report 2000-2001

Performance at a Glance

This is the 13th Annual Report on the working of the National Housing Bank (NHB) submitted in terms of section 40(5) of the National Housing Bank Act, 1987 for the year July 1, 2000 to June 30, 2001.1.1 Highlights of the performance of NHB for the past two years are as follows:
* Excluding the number of units refinanced under Land Development and Shelter Projects (LDSP) / Rental Housing Projects (RHP) to the lending institutions and line of credit to Housing and Urban Development Corporation Ltd.(HUDCO) & GIC Housing Finance Limited.1.2 Refinance disbursals during the year increased from Rs.841.68 crore in 1999-2000 to Rs.1003.13 crore in 2000-2001. Under the direct financing window, NHB disbursed a sum of Rs.42.05 crore out of its general fund as compared with Rs.40.74 crore during the last year. In addition, NHB also disbursed directly a sum of Rs.27.37 crore out of the special fund as against Rs. 9.76 crore in the year 1999-2000. Thus, the total disbursement during the year (July 2000 to June 2001) was Rs. 1072.55 crore as against a total disbursement of Rs. 892.18 crore during the corresponding period of the last year i.e. an increase of 20.22 %.1.3 The overdues as a percentage of demand raised during the year 2000-01 was 0.05% showing a recovery of 99.95%.1.4 The Bank raised resources of the order of Rs.499.50 crore during the year 2000-01 through floatation of tax-free bonds and priority sector bonds.1.5 During the last few years the financial sector witnessed frequent changes in the interest rates. While the interest rates moved up during the third quarter of the year 2000 after the Reserve Bank of India (RBI) hiked the Bank Rate, it declined sharply in the first quarter of 2001after reduction in Bank Rate and CRR by RBI. Consequently, last year, the interest rate on NHB refinance also underwent changes three times, in September, 2000, March 2001 and in April 2001. The rate of interest applicable to project lending also underwent certain changes in accordance with the prevailing market conditions. The details are given in the later chapters.1.6 Keeping in view the increasingly diversified requirement of the housing sector, NHB introduced changes pertaining to its refinance policy such as enhancement of loan slab, prepayment policy, substitution of book debts and security for refinance for Apex Cooperative Housing Finance Societies (ACHFS).

1.7 In terms of the National Housing Bank(Amendment) Act, 2000, the HFCs are required to register with NHB for commencement of or carrying on the housing finance business. The last date for submitting application for registration for the HFCs existing as on June 12,2000 i.e. the date on which the NHB(Amendment) Act, 2000 came into force, was December 11, 2000. 149 HFCs have applied for registration and their applications are in various stages of scrutiny.

1.8 During the year, one housing finance company was prohibited from accepting/ renewing deposits, for contravention of the various provisions of the Housing Finance Companies (NHB) Directions, 1989. The prohibitory orders were issued as a measure aimed at safeguarding public interest. The total number of HFCs who have been prohibited from accepting / renewing public deposits stood at 33 as at the end of June, 2001. 1.9 As a part of its promotional role, NHB conducted 5 training programmes during the year for the various institutions in the housing sector including one training programme on Housing Finance in which officials from leading housing agencies in Bangladesh participated. Apart from these, the Bank also extended financial and technical support to the National Cooperative Housing Federation of India (NCHF) and National Centre for Management Development in Agriculture and Rural Development Banking (NCMDARDB) for designing and conducting their training programmes.

1.10 The Union Budget 2001-02 withdrew the tax exemption status of NHB.