(As amended up to 11th May, 2001)
THE NATIONAL HOUSING BANK ACT, 1987
No. 53 of 1987
[23rd December, 1987.]
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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.
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Be it enacted by Parliament in the Thirty-eighth Year of the
Republic of India as follows:-
CHAPTER I
Preliminary
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1.
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(1) This
Act may be called the National Housing Bank Act,
1987.
(2) It extends to the whole of India.
(3) It shall come into force on such date1 as
the Central Government may, by notification in the Official Gazette,
appoint, and different dates may be appointed for different provisions
of this Act and any reference in any provision to the commencement
of this Act shall be construed as a reference to the coming into
force of that provision.
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Short title,
extent and commencement |
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2.
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In this Act, unless
the context otherwise requires,-
(a) "Board" means the Board
of Directors of the National Housing
Bank referred to in section 6;
(b) "Chairman" means the Chairman of the Board appointed
under section 6;
(c) "director" means a director appointed under section
6;
(d) "housing finance institution" includes every institution,
whether incorporated or not, which primarily transacts or has
as 2[one of its principal objects], the transacting
of the business of providing finance for housing, whether directly
or indirectly;
(e) "Managing Director" means the Managing Director appointed
under section 6;
(f) "National Housing Bank" means the National Housing
Bank established under section 3;
(g) "notification" means a notification published in the
Official Gazette;
(h) "prescribed" means prescribed by regulations made under
this Act;
(i) " Reserve Bank" means the Reserve Bank of India constituted
under section 3 of the Reserve Bank of India Act, 1934;
(j) words and expressions used herein and not defined but
defined in the Reserve Bank of India Act, 1934, shall have
the meanings respectively assigned to them in that Act;
(k) words and expressions used herein and not defined either
in this Act or in the Reserve Bank of India Act, 1934, but
defined in the Banking Regulation Act, 1949, shall have the
meanings respectively assigned to them in the Banking Regulation
Act, 1949.
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Definitions. |
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| 2
of 1934 |
| 2
of 1934 |
2 of 1934
10 of 1949 |
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1All the provisions of
the Act except Chapter V and sub-section (3) of section
49 were brought into force on 9th July, 1988 See
Notification No. S.O. 684(E) dated 9th July,1988,Gazette
of India, Extraordinary, Pt. II, Sec. 3(ii) and provisions
of Chapter V and sub-section (3) of section 49 were
brought into force on 1st June, 1989 See Notification
No. S.O. 394(E) dated 1st June, 1989, Gazette of
India, Extraordinary, Pt. II, Sec. 3(ii).
2 Substituted by Act No. 15
of 2000, sec. 2 (w.e.f. 12th June, 2000),
for "its principal object".
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CHAPTER II
ESTABLISHMENT OF THE NATIONAL HOUSING
BANK AND CAPITAL THEREOF
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| Establishment
and incorporation of National Housing Bank. |
3.
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(1) With
effect from such date1 as the Central
Government may, by notification, appoint, there shall
be established for the purposes of this Act, a bank
to be known as the National Housing Bank.
(2) The National Housing Bank shall be a body corporate with
the name aforesaid having perpetual succession and a common seal
with power, subject to the provisions of this Act, to acquire,
hold and dispose of property and to contract, and may, by that
name, sue and be sued.
(3) The head office of the National Housing Bank shall be
at Bombay or at such other place as the Reserve Bank may, by
notification, specify.
(4) The National Housing Bank may establish offices, branches
or agencies at any place in India, and with the previous approval
of the Reserve Bank, at any place outside India.
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| Capital. |
24.
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(1) The authorised
and paid up capital of the National Housing Bank
shall be three hundred and fifty crores of rupees:
Provided that the Central Government may, in
consultation with the Reserve Bank, by notification,
increase the authorised capital up to two thousand
crores of rupees.
(2) The Board may, on such terms and conditions,
as determined by it from time to time, issue the
increased authorised capital to Reserve Bank, the
Central Government, scheduled banks, public financial
institutions, housing finance institutions or such
other institutions, as may be approved by the Central
Government:
Provided that no increase in the issued capital shall be made
in such manner that the Reserve Bank, the Central Government,
public sector banks, public financial institutions or other institutions
owned or controlled by the Central Government, hold in aggregate
at any time, less than fifty one per cent. of the issued capital
of the National Housing Bank.]
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1 The National Housing
Bank was established on 9th July, 1988 See
Notification No. S.O. 685(E) dated 9th July,1988,
Gazette of India, Extraordinary, Pt. II, Sec. 3(ii).
2 Substituted by Act No. 15
of 2000, sec. 3 (w.e.f. 12th June,
2000), for -
"4. The authorised and paid up capital of the National Housing Bank shall be
one hundred crores of rupees and shall be subscribed by the Reserve Bank:
Provided that the Central Government may, in consultation with
the Reserve Bank, by notification, increase the said capital
up to five hundred crores of rupees and the capital so increased
shall also be subscribed by the Reserve Bank."
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CHAPTER III
MANAGEMENT OF THE NATIONAL HOUSING BANK
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5.
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(1) The general superintendence, direction
and management of the affairs and business of the
National Housing Bank shall vest in the Board of
Directors, which shall exercise all powers and do
all acts and things, which may be exercised or done
by the National Housing Bank.
(2) Subject to the provisions of this Act,
the Board, in discharging its functions, shall act
on business principles with due regard to public
interest.
(3) Subject to the provisions of sub section (1) and
save as otherwise provided in the regulations made
under this Act, -
1[(a) the Chairman, if he is
a whole-time director or if he is holding offices
both as the Chairman and the Managing Director,
or
(b) the Managing Director, if the Chairman
is not a whole-time director, or if the
Chairman being a whole-time director, is absent,]shall
also have powers of general superintendence, direction
and management of the affairs and business of the
National Housing Bank and may also exercise all
powers and do all acts and things which may be
exercised or done by the National Housing Bank
and shall act on business principles with due regard
to public interest.
(4) The Managing Director shall, in the discharge
of his powers and functions, follow such directions
as the Chairman may give.
(5) In the discharge
of its functions under this Act, the National Housing
Bank shall be guided by such directions in matters
of policy involving public interest as the Central
Government, in consultation with the Reserve Bank,
or the Reserve Bank, may give in writing.
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Management |
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6.
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(1)The Board of Directors of the National
Housing Bank shall consist of the following, namely:-
(a) a Chairman and a Managing Director:
Provided that the same person may be appointed
as Chairman and Managing Director;
(b) 2[two directors] from
amongst the experts in the field of housing, architecture,
engineering, sociology, finance, law, management
and corporate planning or in any other field, special
knowledge of which is considered useful to the
National Housing Bank;
3[(c) two directors, who shall
be persons with experience in the working of institutions
involved in providing funds for housing or engaged
in housing development or have experience in the
working of financial institutions or scheduled
banks;
(ca) two directors elected in such manner
as may be prescribed by shareholders other than
the Reserve Bank, the Central Government and other
institutions owned or controlled by the Central
Government;]
(d) two directors from out of the directors
of the Reserve Bank;
(e) three directors from amongst the officials
of the Central Government;
(f) two directors from amongst the officials
of the State Government.
(2) The Chairman, the Managing
Director and other directors 4[excluding
the directors referred to in clauses (ca) and (d)],
shall be appointed by the Central Government
in consultation with the Reserve Bank and directors
referred to in clause (d) shall be nominated
by the Reserve Bank.
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Board of Directors |
1 Substituted by Act No.
15 of 2000, sec. 4 (w.e.f. 12th June,
2000), for -
"(a) the Chairman, if he is holding
offices both as the Chairman and the
Managing Director, or
(b) the Managing Director, if
the Chairman is absent,".
2 Substituted by Act No. 15
of 2000, sec. 5 (a)(i) (w.e.f.
12th June, 2000), for "three
directors".
3 Substituted by Act No. 15
of 2000, sec. 5 (a)(ii) (w.e.f.
12th June, 2000), for -
"(c) three directors, who shall be persons with experience in the working
of institutions involved in providing funds for housing or engaged in housing
development;".
4 Substituted by Act No. 15
of 2000, sec. 5 (b) (w.e.f. 12th June,
2000), for "excluding the directors referred
to in clause (d)".
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| Term of office
of Chairman, Managing Director and other directors,
service conditions, etc. |
7.
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(1) The Chairman and the Managing Director
shall hold office for such term, not exceeding five
years and shall receive such salary and allowances
and be governed by such terms and conditions of service
as the Central Government may, in consultation with
the Reserve Bank, specify and shall be eligible for
re-appointment:
Provided that the Chairman or, as the case may
be, the Managing Director shall, notwithstanding
the expiration of his term, continue to hold office
until his successor enters upon his office.
(2) The directors referred to in 2[clauses (b),
(c) and (ca)] of sub-section (1) of
section 6 shall hold office for a term of three
years:
Provided that any such director shall, notwithstanding
the expiration of his term, continue to hold office
until his successor enters upon his office.
(3) The Central Government may, in consultation
with the Reserve Bank, remove the Chairman or the
Managing Director, or any other director referred
to in sub-section (2), at any time before
the expiry of his term of office after giving him
a reasonable opportunity of showing cause against
the proposed removal.
(4) Notwithstanding anything contained in
sub-section (1) and (3), the Central
Government, in consultation with the Reserve Bank,
shall have the right to terminate the term of office
of the Chairman or, as the case may be, the Managing
Director, at any time before the expiry of the term
specified under sub-section (1), by giving
him notice of not less than three months in writing
or three months' salary and allowances in lieu thereof
and the Chairman or the Managing Director, as the
case may be, shall also have the right to relinquish
his office at any time before the expiry of the term
specified under sub-section (1), by giving
to the Central Government notice of not less than
three months in writing or three months' salary and
allowances in lieu thereof.
(5) The directors shall be paid such fees
and allowances as may be prescribed for attending
the meetings of the Board or of any of its committees
and for attending to any other work of the National
Housing Bank:
Provided that no such fee shall be payable to any director,
who is an official of the Government or a director of the
Reserve Bank.
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| Disqualifications |
8.
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No person shall be a director of the Board, if he-
(a) is, or becomes of unsound mind and
has been so declared by a competent court; or
(b) is or has been convicted of any offence
which, in the opinion of the Central Government,
involves moral turpitude; or
(c) is, or at any time has been, adjudicated
as insolvent or has suspended payment of his debts
or has compounded with his creditors; or
(d) has, for any reason, been removed or
dismissed from the service of -
(i) the Government, or
(ii) the Reserve Bank, the State Bank
or any other bank, or
(iii) any public financial institution,
or state financial corporation,or
(iv) any other corporation owned or controlled
by the Government.
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2 Substituted by Act No.
15 of 2000, sec. 6 (w.e.f. 12th June, 2000),
for "clause (b) and (c)".
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9.
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(1) If a director -
(a) becomes subject to any of the disqualifications
mentioned in section 8; or
(b) is absent without leave of the Board
for three or more consecutive meetings thereof,
his seat shall thereupon become vacant.
(2) Any director may resign his office by giving
notice thereof in writing to the authority that appointed
or, as the case may be, nominated him and on his resignation
being accepted by such authority or if his resignation
is not sooner accepted, on the expiry of three months
from the receipt thereof by such appointing authority,
he shall be deemed to have vacated his office.
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Vacation and
resignation of office by directors. |
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10.
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If the Chairman, or as the case
may be, the Managing Director, is by infirmity
or otherwise rendered incapable of carrying out
his duties or is absent on leave or otherwise,
in circumstances not involving the vacation of
his appointment, the Central Government may, appoint
another person to act in his place during his absence.
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Casual vacancy
in the office of Chairman or Managing Director |
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11.
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(1) The
Board shall meet at such times and places and shall
observe such rules of procedure in regard to the
transaction of business at its meetings, as may be
prescribed.
(2) The Chairman, or, if for any reasons he is unable to
attend a meeting of the Board, the Managing Director, or, in
the event of both the Chairman and the Managing Director being
unable to attend a meeting, any other director nominated by the
Chairman in this behalf and in the absence of such nomination,
any director elected by the directors present from among themselves
at the meeting, shall preside at the meeting.
(3) All questions which come up before any meeting of the
Board shall be decided by a majority of votes of the directors
present and voting, and in the event of any equality of votes,
the Chairman, or, in his absence, the person presiding, shall
have a second or casting vote.
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Meetings of
Board |
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12.
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(1) The
Board may constitute an Executive Committee consisting
of such number of directors as may be prescribed.
(2) The Executive Committee shall
discharge such functions as may be prescribed,
or, as may be delegated to it, by the
Board.
(3) The Board may constitute such other committees, whether
consisting wholly of directors or wholly of other persons or
partly of directors and partly of other persons as it thinks
fit for such purposes, as it may decide and any committee so
constituted shall discharge such functions as may be delegated
to it by the Board.
(4) The Executive Committee or any other committee constituted
under this section shall meet at such times and places and shall
observe such rules of procedure in regard to transaction of business
at its meetings, as may be prescribed.
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Executive committee
and other committees. |
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13.
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Any director of
the Board or any member of a committee, who has any
direct or indirect pecuniary interest in any matter
coming up for consideration at a meeting of the Board
or a committee thereof, shall, as soon as possible
after relevant circumstances have come to his knowledge,
disclose the nature of his interest at such meeting
and the disclosure shall be recorded in the minutes
of the Board, or the committee, as the case may be,
and the director or member shall not take any part
in any deliberation or decision of the Board or the
committee with respect to that matter.
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Director of
Board or member of committee thereof not to participate
in meetings in certain cases. |
CHAPTER IV
BUSINESS OF THE NATIONAL HOUSING BANK
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14.
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Subject to the provisions
of this Act, the National Housing Bank may transact
all or any of the following kinds of business, namely:-
(a) promoting, establishing, supporting or aiding in the
promotion, establishment and support of housing finance institutions;
1[(b) making of loans and advances or rendering
any other form of financial assistance whatsoever for housing
activities to housing finance institutions, scheduled banks,
state co-operative agricultural and rural development banks or
any other institution or class of institutions as may be notified
by the Central Government;
(ba) making of loans and advances
for housing or residential township-cum-housing
development or slum clearance projects;]
(c) subscribing to or purchasing
stocks, shares, bonds, debentures and
securities of every other description;
(d) guaranteeing the financial obligations of housing finance
institutions and underwriting the issue of stocks, shares, bonds,
debentures and securities of every other description of housing
finance institutions;
(e) drawing, accepting, discounting or rediscounting, buying
or selling and dealing in bills of exchange, promissory notes,
bonds, debentures, hundies, coupons and other instruments by
whatever name called;
2[(ea) buying, selling
or otherwise dealing in any loans or
advances secured by mortgage or charge
of the immovable property relating
to scheduled banks or housing finance
institutions;
(eb) creating one or more trusts and transferring loans
or advances together with or without securities therefor to
such trusts for consideration;
(ec) setting aside loans or advances held by the National
Housing Bank and issuing and selling securities based upon
such loans or advances so set aside in the form of debt obligations,
trust certificates of beneficial interest or other instruments,
by whatever name called, and to act as trustee for the holders
of such securities;
(ed) setting up of one or more mutual funds for undertaking
housing finance activities;
(ee) undertaking or participating in housing mortgage insurance;]
3[(f) promoting, forming,
conducting or associating in the promotion,
formation or conduct of companies, mortgage
banks, subsidiaries, societies, trusts
or such other association of persons
as it may deem fit for carrying out all
or any of its functions under this Act;]
(g) undertaking research and surveys on construction techniques
and other studies relating to or connected with shelter, housing
and human settlement;
(h) formulating one or more schemes for the purpose of mobilisation
of resources and extension of credit for housing;
4[(hh) formulating
a scheme for the purpose of accepting
deposits referred to in clause (a) of
section 2 of the Voluntary Deposits
(Immunities and Exemptions) Act, 1991
and crediting forty per cent. of the
amount of such deposits to a special
fund created under section 37;]
(i) formulating one or more schemes
for the economically weaker sections
of society which may be subsidised by
the Central Government or any State Government
or any other source;
(j) organising training programmes, seminars and symposia
on matters relating to housing
(k) providing guidelines to the
housing finance institutions to ensure
their growth on sound lines;
(l) providing technical and administrative
assistance to housing finance institutions;
(m) co-ordinating with the Life
Insurance Corporation of India, the Unit
Trust of India, the General Insurance
Corporation of India and other financial
institutions, in the discharge of its
overall functions;
(n) exercising all powers and
functions in the performance of duties
entrusted to the National Housing Bank
under this Act or under any other law
for the time being in force;
(o) acting as agent of the Central
Government, the State Government or the
Reserve Bank or of any authority as may
be authorised by the Reserve Bank;
(p) any other kind of business
which the Central Government may, on
the recommendation of the Reserve Bank,
authorise;
(q) generally, doing of all such
matters and things as may be incidental
to or consequential upon the exercise
of its powers or the discharge of its
duties under this Act.
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Business of
the National Housing Bank. |
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1 Substituted by Act No.
15 of 2000, sec. 7 (i) (w.e.f. 12th June,
2000), for -
"(b) making of loans and advances or rendering any other form of financial
assistance whatsoever to housing finance institutions and scheduled banks @[or
to any authority established by or under any Central, State or Provincial Act
and engaged in slum clearance];".
@ Inserted by Act No. 47 of
1991, sec. 5 (a) (i) (w.e.f. 20th September,
1991).
2 Inserted by Act No. 15 of
2000, sec. 7 (ii) (w.e.f. 12th June,
2000).
3 Substituted by Act No. 15
of 2000, sec. 7 (iii) (w.e.f.
12th June, 2000), for -
"(f) forming, promoting and managing subsidiaries for carrying out all
or any of its functions under this Act;".
4 Inserted by Act No. 47 of
1991, sec. 5 (a) (ii) (w.e.f.
20th September, 1991).
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15.
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(1) The
National Housing Bank may, for the purpose of carrying
out its functions under this Act -
(a) Issue and sell bonds and
debentures with or without the guarantee
of the Central Government, in such
manner and on such terms as may be
prescribed;
(b) borrow money from 1[the
Central Government, scheduled banks,
financial institutions, mutual funds] and
from any other authority or organisation
or institution approved by that Government
on such terms and conditions as may
be agreed upon;
(c) accept deposits repayable
after the expiry of 2[such
period and] on such terms
as may generally or specially be
approved by the Reserve Bank;
3[Provided that nothing
contained in this clause shall apply
to deposits accepted under the scheme
formulated by the Bank in pursuance
of clause (hh) of section
14;]
(d) borrow money from the
Reserve Bank -
4[(i) by way
of loans and advances and generally
obtain financial assistance in
such manner or on such terms and
conditions as may be specified
by the Reserve Bank;]
(ii) out of the National
Housing Credit (Long Term Operations)
Fund established under section
46D of the Reserve Bank of India
Act, 1934 for any of the purposes
specified in that section;
(e) receive for services
rendered, such remuneration, commission,
commitment charges, consultancy charges,
service charges, royalties, premia,
license fees and any other consideration
of whatever description;
(f) receive gifts, grants,
donations or benefactions from Government
or any other source.
(2) The Central Government may,
on a request being made to it by the
National Housing Bank, guarantee the
bonds and debentures issued by the National
Housing Bank as to the repayment of principal
and the payment of interest at such rate
as may be fixed by that Government.
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Borrowings
and acceptance of deposits by National Housing Bank. |
| 2 of 1934 |
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1. Substituted by Act
No. 15 of 2000, sec. 8 (a) (w.e.f. 12th June,
2000), for "the Central Government".
2. Substituted by Act No.
15 of 2000, sec. 8 (b) (w.e.f.
12th June, 2000), for "a period
which shall not be less than twelve months
from the date of the making of the deposit".
3. Added by Act No. 47 of
1991, sec. 5 (b) (w.e.f. 20th September,
1991).
4. Substituted by Act No.
15 of 2000, sec. 8 (c) (w.e.f.
12th June, 2000), for-
"(i) repayable on demand or on the expiry of fixed periods not exceeding
eighteen months from the date of the making of loan or advance, on such terms
and conditions including the terms relating to security and purpose as may be
specified by the Reserve Bank;".
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| Loans in foreign
currency |
16.
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(1) Notwithstanding
anything contained in the Foreign Exchange Regulation
Act, 1973 or in any other law for the time being
in force relating to foreign exchange, the National
Housing Bank may, for the purpose of making loans
and advances under this Act, borrow in such manner
and on such conditions as may be prescribed in consultation
with the Reserve Bank and with the previous approval
of the Central Government, foreign currency from
any bank or financial institution in India or elsewhere.
(2) The Central Government may, where
necessary, guarantee any loan taken by the National
Housing Bank under sub-section (1) or
any part thereof as to the repayment of principal
and the payment of interest and other incidental
charges.
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46 of 1973 |
| Assistance
to borrower when to operate or a charge in the property
offered as security. |
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1[16A. (1) Where any person
or institution seeks any financial assistance from
the National Housing Bank on the security of any
immovable property belonging to him or to that institution
or on the security of the property of some other
person whose property is offered as a collateral
security for such assistance, such person or institution
or, as the case may be, such other person may execute
a written declaration in the form set out in the Third
Schedule to this Act stating therein the particulars
of the immovable property which is proposed to be
offered as security, or as the case may be, collateral
security, for such assistance and agreeing that the
dues relating to the assistance, if granted, shall
be a charge on such immovable property and, if on
receipt of such declaration, the National Housing
Bank grants any financial assistance to the person
or institution aforesaid, the dues relating to such
assistance shall, without prejudice to the rights
of any other creditor holding any prior charge or
mortgage in respect of the immovable property so
specified, be, by virtue of the provisions of this
section, a charge on the property specified in the
declaration aforesaid.
(2) Where any further immovable
property is offered by a person or
an institution as security for the
financial assistance referred to
in sub-section (1), such person
or institution may execute a fresh
declaration, as far as may be in
the form set out in the Third Schedule
to this Act, whereupon the dues relating
to such assistance shall, by virtue
of the provisions of this section,
also be a charge on the property
specified in such fresh declaration.
(3) A declaration made under
sub-section (1) or sub-section (2) may
be varied or revoked at any time
by the person or institution as
aforesaid, with the prior approval of the National Housing
Bank.
(4) Every declaration made
under sub-section (1) or sub-section (2),
shall be deemed to be a document
registrable as an agreement under
the provisions of the Registration
Act, 1908 and no such declaration
shall have effect unless it is so
registered.
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| 16 of 1908. |
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16B. (1) Any sums received by a borrowing
institution in repayment or realisation of loans
and advances financed or refinanced either wholly
or partly by the National Housing Bank shall, to
the extent of the accommodation granted by the National
Housing Bank and remaining outstanding, be deemed
to have been received by the borrowing institution
in trust for the National Housing Bank, and shall
accordingly be paid by such institution to the National
Housing Bank.
(2) Where any accommodation
has been granted by the National
Housing Bank to a borrowing institution,
all securities held, or which may
be held, by such borrowing institution
on account of any transaction in
respect of which such accommodation
has been granted, shall be held by
such institution in trust for the
National Housing Bank.]
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1. Inserted by Act No.
15 of 2000, sec. 9 (w.e.f. 12th June,
2000).
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17.
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The rights and interest
of the National Housing Bank (including any other
rights incidental thereto) in relation to any loan
or advance made, or any amount recoverable, by it,
may be transferred by the National Housing Bank,
either in whole or in part, by the execution or issue
of any instrument or by the transfer of any instrument
by endorsement, or in any other manner in which the
rights and interests in relation to such loan or
advance may be lawfully transferred, and the National
Housing Bank may, notwithstanding such transfer,
act as the trustee within the meaning of section
3 of the Indian Trusts Act, 1882, for the transferee.
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Power to transfer
rights. |
| 2 of 1882. |
18.
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The National Housing
Bank shall have the right to acquire, by transfer
or assignment, the rights and interests of any 1[institution]
(including any other rights incidental thereto) in
relation to any loan or advance made, or any amount
recoverable by such institution, either in whole
or in part, by the execution or issue of any instrument
or by the transfer of any instrument or in any other
manner in which the rights and interests in relation
to such loan or advance may be lawfully transferred.
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Power to acquire
rights. |
| 16 of 1908. |
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2[18A. Notwithstanding anything
contained in sub-section (1) of section 17
of the Registration Act, 1908, -
(a) any instrument in the
form of debt obligations or trust
certificate of beneficial interest
or other instruments, by whatever
name called, issued by the National
Housing Bank to securitise the loans
granted by the housing finance institutions
and scheduled banks, and not creating,
declaring, assigning, limiting or
extinguishing any right, title or
interest, to or in immovable property
except in so far as it entitles the
holder to an undivided interest afforded
by a registered instrument, whereby
the National Housing Bank has acquired
the rights and interests in relation
to such loans and in securities therefor;
or
(b) any transfer of such
instruments referred to in clause
(a), shall not require compulsory
registration.
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Exemption from
registration. |
| |
|
18B. Where any amount is due under an agreement
to the National Housing Bank, whether acting as a
trustee or otherwise, in respect of securitisation
of loans of housing finance institutions and scheduled
banks, the National Housing Bank may without prejudice
to any other mode of recovery make an application
to the State Government for the recovery of the amount
due to it, and if the State Government or such authority,
as that Government may specify in this behalf, is
satisfied that any amount is due, it may issue a
certificate for the amount to the Collector and the
Collector shall proceed to recover that amount in
the same manner as arrears of land revenue.]
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Recovery of
dues as arrears of land revenue. |
| |
19.
|
In entering into
any transaction under this Chapter with any borrowing 3[institution],
the National Housing Bank may impose such conditions
as it may think necessary or expedient for protecting
the interests of the National Housing Bank.
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Power to impose
conditions for accommodation |
| |
20.
|
Notwithstanding
anything to the contrary contained in any agreement,
the National Housing Bank may, by notice in writing,
require any borrowing 3[institution] to
discharge forthwith in full its liabilities to the
National Housing Bank -
(a) if it appears to the Board
that false or misleading information
in any material particular was given
in the application for the loan or
advance; or
(b) if the borrowing 3[institution] has
failed to comply with any of the
terms of the agreement with the National
Housing Bank in the matter of the
loan or advance; or
(c)if there is a reasonable
apprehension that the borrowing 3[institution] is
unable to pay its debts or that proceedings
for liquidation may be commenced
in respect thereof; or
(d) if for any reason, it
is necessary so to do to protect
the interests of the National Housing
Bank.
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Power to call
for repayment before agreed period. |
|
1 Substituted by Act No.
15 of 2000, sec. 10 (w.e.f. 12th June,
2000), for "housing finance institution".
2 Inserted by Act No. 15 of
2000, sec. 11 (w.e.f. 12th June,
2000).
3 Substituted by Act No. 15
of 2000, sec. 12 (w.e.f. 12th June,
2000), for "housing finance institutions".
|
| National Housing
Bank to have access to records. |
21.
|
(1) The
National Housing Bank shall have free access to all
such records of any 1[institution] which
seeks to avail of any credit facilities from the
National Housing Bank and to all such records of
any person who seeks to avail of any credit facilities
from such 1[institution], the
perusal of which may appear to the National Housing
Bank to be necessary in connection with the providing
of finance or other assistance to such 1[institution] or
the refinancing of any loan or advance made to such
person by that 1[institution].
(2) The National Housing Bank
may require any institution or person
referred to in sub-section (1),
to furnish to it copies of any of the
records referred to in that sub-section
and the institution or the person, as
the case may be, shall be bound to comply
with such requisition.
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|
| Validity of
loan or advance not to be questioned. |
22.
|
Notwithstanding
anything to the contrary contained in any other law
for the time being in force, the validity of any
loan or advance made by the National Housing Bank
in pursuance of the provisions of this Act shall
not be called in question merely on the ground of
non-compliance with the requirements of such other
law or of any resolution, contract, or any instrument
regulating the constitution of the borrowing 1[institution]:
Provided that nothing in this section shall enable any company
or cooperative society to obtain any loan or advance where the
instrument relating to the constitution of such company or co-operative
society does not empower such company or co-operative society
so to do.
|
|
| National Housing
Bank not to make loans or advances against its own
bonds or debentures. |
23.
|
The National Housing Bank shall not make any loan
or advance on the security of its own bonds or debentures.
|
|
| Power to inspect |
24.
|
(1) The
National Housing Bank may at any time and shall,
on being directed so to do by the Reserve Bank, cause
an inspection to be made by one or more of its officers
of any 1[institution] to which
the National Housing Bank has made any loan or advance
or granted any other financial assistance, and its
books, accounts and other documents; and the National
Housing Bank shall supply to the 1[institution] a
copy of its report on such inspection.
(2) It shall be the duty of every
officer, employee or other person or
persons in charge of the whole or part
of the affairs of the 1[institution] to
produce to any officer making an inspection
under sub-section (1), all such
books, accounts and other documents in
his custody or power and to furnish within
such time as the said officer may specify,
any statements, information relating
to the affairs of the 1[institution] as
the said officer may require of him.
|
|
| Power to collect
credit information |
25.
|
(1) The
National Housing Bank may, for the purpose of the
efficient discharge of its functions under this Act,
at any time direct any 1[institution] to
submit to it credit information in such form and
within such time as may be specified by the National
Housing Bank from time to time.
(2) Every 1[institution] shall,
notwithstanding anything to the contrary
contained in any law for the time being
in force or in any instrument regulating
the constitution thereof or in any agreement
executed by it, relating to the secrecy
of its dealings with its constituents,
be bound to comply with any directions
issued under sub-section (1).
(3) The National Housing Bank
may, for the purpose of the efficient
discharge of its functions under this
Act, collect from the Central and State
Governments, local authorities, the Reserve
Bank, any bank or such financial or other
institutions as the Reserve Bank may
specify in this behalf, credit information
or other information.
Explanation. - For the purposes
of this section and section 26, credit
information means any information relating
to -
(i) the amount of loans and
advances and other credit facilities
granted for the purpose of housing;
(ii) the nature of security
taken for such loans, advances or
other credit facilities;
(iii) the guarantees furnished;
and
(iv) any other information
which has a bearing on the credit-worthiness
of the borrower.
|
|
1.Substituted by Act No.
15 of 2000, sec. 12 (w.e.f. 12th June,
2000), for "housing finance institutions".
Explanation. - For the purposes
of this section and section 26, credit
information means any information relating
to -
(i) the amount of loans and
advances and other credit facilities
granted for the purpose of housing;
(ii) the nature of security
taken for such loans, advances or
other credit facilities;
(iii) the guarantees furnished;
and
(iv) any other information
which has a bearing on the credit-worthiness
of the borrower.
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| |
26.
|
The National Housing Bank, if it considers it in
the public interest so to do, may publish any credit
information or other information obtained by it under
this Act, in such consolidated form or in any other
form as it thinks fit.
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Power to publish
information |
| |
27.
|
The National Housing
Bank may provide advisory services to the Central
and State Governments, local authorities and other
agencies connected with housing, in respect of -
(a) formulation of overall
policies aimed at promoting the growth
of housing and housing finance institutions;
(b) legislation relating
to matters having a bearing on shelter,
housing and human settlement.
|
Advisory services |
CHAPTER V
PROVISIONS RELATING TO HOUSING FINANCE
INSTITUTIONSRECEIVING DEPOSITS
|
| 2 of 1934 |
28.
|
In this Chapter the term 'deposit' shall have the
meaning assigned to it in section 45I of the Reserve
Bank of India Act, 1934.
|
Definition of
deposit |
| |
29.
|
(1) The provisions of this Chapter shall
not apply to deposits accepted by a housing finance
institution which is a firm or an unincorporated
association of individuals
(2) For the removal of doubts,
it is hereby declared that the firms
and unincorporated associations of
individuals referred to in sub-section (1) shall
continue to be governed by the provisions
of Chapter IIIC of the Reserve Bank
of India Act, 1934.
|
Chapter
not to apply in certain cases. |
| 2 of 1934 |
| |
|
1[29A. (1) Notwithstanding
anything contained in this Chapter or in any other
law for the time being in force, no housing finance
institution which is a company shall commence or
carry on the business of a housing finance institution
without -
(a) obtaining a certificate
of registration issued under this
Chapter; and
(b) having the net owned
fund of twenty five lakh rupees
or such other higher amount,
as the National Housing Bank
may, by notification, specify.
(2) Every such housing finance
institution shall make an application
for registration to the National
Housing Bank in such form as may
be specified by the National Housing
Bank:
Provided that a housing finance institution which is a company
in existence on the commencement of the National Housing Bank
(Amendment) Act, 2000, shall make an application for registration
to the National Housing Bank before the expiry of six months
from such commencement and notwithstanding anything contained
in sub-section (1), may continue to carry on the business
of housing finance institution until a certificate of registration
is issued to it or rejection of application for registration
is communicated to it.
(3) Notwithstanding anything contained in sub-section (1),
a housing finance institution which is a company in existence
on the commencement of the National Housing Bank (Amendment)
Act, 2000, and having a net owned fund of less than twenty
five lakh rupees, may, for the purpose of enabling such institution
to fulfil the requirement of the net owned fund, continue to
carry on the business of a housing finance institution -
(i) for a period of three
years from such commencement; or
(ii) for such further
period as the National Housing
Bank may, after recording the
reasons in writing for so doing,
extend,
subject to the conditions that such institution shall, within
three months of fulfilling the requirement of the net owned
fund, inform the National Housing Bank about such fulfilment:
Provided that the period allowed to continue business under
this sub-section shall in no case exceed six years in the aggregate.
(4) The National Housing
Bank, for the purpose of considering
the application for registration,
may require to be satisfied by an
inspection of the books of such housing
finance institution or otherwise
that the following conditions are
fulfilled:-
(a) that housing finance
institution is or shall be in a
position to pay its present or
future depositors in full as and
when their claims accrue;
(b) that the affairs
of the housing finance institution
are not being or are not likely
to be conducted in a manner detrimental
to the interest of its present
or future depositors;
(c) that the general
character of the management or
the proposed management of the
housing finance institution shall
not be prejudicial to the public
interest or the interests of
its depositors;
(d) that the housing
finance institution has adequate
capital structure and earning
prospects;
(e) that the public interest
shall be served by the grant
of certificate of registration
to the housing finance institution
to commence or to carry on the
business in India;
(f) that the grant of
certificate of registration shall
not be prejudicial to the operation
and growth of the housing finance
sector of the country; and
(g) any other condition,
fulfilment of which in the opinion
of the National Housing Bank,
shall be necessary to ensure
that the commencement of or carrying
on the business in India by a
housing finance institution shall
not be prejudicial to the public
interest or in the interests
of the depositors.
(5) The National Housing
Bank may, after being satisfied that
the conditions specified in sub-section (4) are
fulfilled, grant a certificate of
registration subject to such conditions
which it may consider fit to impose.
(6) the National Housing
Bank may cancel a certificate of
registration granted to a housing
finance institution under this section
if such institution-
(i) ceases to carry on
the business of a housing finance
institution in India; or
(ii) has failed to comply
with any condition subject to
which the certificate of registration
had been issued to it; or
(iii) at any time fails
to fulfil any of the conditions
referred to in clauses (a) to
(g) of sub-section (4);
or
(iv) fails-
(a) to comply with
any direction issued by the
National Housing Bank under
the provisions of this Chapter;
or
(b) to maintain accounts
in accordance with the requirement
of any law or any direction
or order issued by the National
Housing Bank under the provisions
of this Chapter; or
(c) to submit or
offer for inspection its
books of account and other
relevant documents when so
demanded by an inspecting
authority of the National
Housing Bank; or
(v) has been prohibited
from accepting deposit by an
order made by the National Housing
Bank under the provisions of
this Chapter and such order has
been in force for a period of
not less than three months:
Provided that before cancelling a certificate of registration
on the ground that the housing finance institution has failed
to comply with the provisions of clause (ii) or has
failed to fulfil any of the conditions referred to in clauses (a) to
(g) of sub- section (4), the National Housing
Bank, unless it is of the opinion that the delay in cancelling
the certificate of registration shall be prejudicial to public
interest or the interest of the depositors or the housing
finance institution, shall give an opportunity to such institution
on such terms as the National Housing Bank may specify for
taking necessary steps to comply with such provision or fulfilment
of such condition:
Provided further that before making any order of cancellation
of certificate of registration, such institution shall be
given a reasonable opportunity of being heard.
(7) A housing finance institution
aggrieved by the order or rejection
of application for registration or
cancellation of certificate of registration
may prefer an appeal, within a period
of thirty days from the date on which
such order of rejection or cancellation
is communicated to it, to the Central
Government and the decision of the
Central Government where an appeal
has been preferred to it, or of the
National Housing Bank where no appeal
has been preferred, shall be final:
Provided that before making any order of rejection of appeal,
such institution shall be given a reasonable opportunity of
being heard.
Explanation.- For the
purposes of this section,-
(I) "net owned fund" means-
(a) the aggregate of the
paid-up equity capital and free
reserves as disclosed in the latest
balance-sheet of the housing finance
institution after deducting therefrom
-
(i) accumulated balance
of loss;
(ii) deferred revenue
expenditure; and
(iii) other intangible
assets; and
(b) further reduced by
the amounts representing-
(1) investments of
such institution in shares
of-
(i) its subsidiaries;
(ii) compaines
in the same group;
(iii)all other
housing finance institutions
which are companies; and
(2) the book value
of debentures, bonds, outstanding
loans and advances (including
hire-purchase and lease finance)
made to, and deposits with,-
(i) subsidiaries
of such company; and
(ii) companies
in the same group, to the
extent such amount exceeds
ten per cent. of (a) above;
(II) "subsidiaries" and "companies
in the same group" shall have the
same meanings assigned to them in
the Companies Act, 1956.
|
Requirement
of registration and net owned fund. |
|
1 Inserted by Act No. 15
of 2000, sec. 13 (w.e.f. 12th June,
2000).
|
| Maintenance
of percentage of assets. |
|
29B. (1) Every housing finance institution
shall invest and continue to invest in India in unencumbered
approved securities, valued at a price not exceeding
the current market price of such securities, an amount
which, at the close of business on any day, shall
not be less than five per cent. or such higher percentage
not exceeding twenty-five per cent. as the National
Housing Bank may, from time to time and by notification,
specify, of the deposits outstanding at the close
of business on the last working day of the second
preceding quarter.
(2) Every housing finance
institution shall maintain in India
in an account with a scheduled bank
in term deposits or certificate of
deposits (free of charge or lien)
or in deposits with the National
Housing Bank or by way of subscription
to the bonds issued by the National
Housing Bank, or partly in such account
or in such deposit or partly by way
of such subscription, a sum which,
at the close of business on any day,
together with the investment made
under sub-section (1) shall
not be less than ten per cent. or
such higher percentage not exceeding
twenty-five per cent., as the National
Housing Bank may, from time to time
and by notification specify, of the
deposits outstanding in the books
of the housing finance institution
at the close of business on the last
working day of the second preceding
quarter.
(3) For the purpose of ensuring
compliance with the provisions of
this section, the National Housing
Bank may require every such housing
finance institution to furnish a
return to it in such form, in such
a manner and for such period as may
be specified by the National Housing
Bank.
(4) If the amount invested
by a housing finance institution
at the close of business on any day
is less than the rate specified under
sub-section (1) or sub-section (2),
such housing finance institution
shall be liable to pay to the National
Housing Bank, in respect of such
shortfall, a penal interest at a
rate of three per cent. per annum
above the bank rate on such amount
by which the amount actually maintained
or invested falls short of the specified
percentage, and where the shortfall
continues in the subsequent quarters,
the rate of penal interest shall
be five per cent. per annum above
the bank rate on such shortfall for
each subsequent quarter.
(5) (a) The penal interest
payable under sub-section (4) shall
be payable within a period of fourteen
days from the date on which a notice
issued by the National Housing Bank
demanding payment of the same is
served on the housing finance institution
and, in the event of a failure of
the housing finance institution to
pay the same within such period,
may be levied by a direction of the
principal civil court having jurisdiction
in the area where an office of the
defaulting housing finance institution
is situated and such direction shall
be made only upon and application
made in this behalf to the court
by the National Housing Bank; and
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