Irrelevance of National Housing Bank

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By Shri. Murari Chaturvedi, Editor-in-Chief, Accommodation Times

National Housing Bank (NHB) was created to cater the needs of Housing Industry has lost its relevance in housing finance sector. The NHB is headless as it has no Chairman from more than 6 months. NHB is giving loans to other housing finance companies against their loans to individuals. And the loan by NHB to housing finance companies carry high rate of interest which is higher or at par with that of housing finance companies. When repeatedly asked by Accommodation Times about the exact rate of interest the NHB changes on their loans, there was no reply. It is really pitiable that the apex bank in real estate sector, NHB, has no reply to this simple question that what is the rate of interest that the NHB charges on the loans given to the borrowers, HFC’s. Their website is equally non-committal about the rate of interest which NHB charges to the HFCs. Now since last one year when the government has opened Foreign Direct Investment (FDI) route in the housing finance sector HDFC has recently availed loan from Germany at 4% and many more companies HFC’s are in line for such loans to refinance their housing finance loans. With the result HFC’s taking loans to finance their loans are no more going to NHB for loans. NHB doing business with the HFC’s is drying up. The main purpose for which the NHB was created by the government for the purpose of giving housing finance to the masses in urban and rural areas. So why the NHB is not coming forward to directly give housing loans to individuals. They have big organizational set- up and capacity to expand and can set-up offices throughout the country to give housing loans to the people directly. In present scenario the NHB is completely irrelevant and should be scrapped as it has outlived its productive life. But to survive, NHB has to come clean about the rate of interest it charges and open its door to the millions of individual home loan seekers





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