What is the National Housing Bank (NHB)?

About National Housing Bank (NHB):

• It is an apex agency established to promote housing finance companies (HFCs) in India. 
• It is an All-India Financial Institution (AIFl) wholly owned by the Government of India (GoI).
• NHB supervises HFCs, while regulation of HFCs is with the Reserve Bank of India (RBI).
• Formation:
  • The National Housing Policy, 1988, envisaged the setting up of NHB as the apex-level institution for housing.
  • In pursuance of the above, NHB was set up on July 9, 1988, under the National Housing Bank Act, 1987.
  • RBI contributed the entire paid-up capital.
• NHB is wholly owned by the GoIpost the 24 April 2019 notification of RBI i.e. The entire paid-up capital of NHB is held by the government.
• In terms of the amendment made to the National Housing Bank Act, 1987, pursuant to the Union Budget announcements for 2019-20, the regulatory powers (including registration of HFCs) of NHB over HFCs were transferred to the RBI with effect from August 9, 2019. 
• The broad functions of NHB as a part of its objective of building a strong, healthy, cost-effective, and viable Housing Finance System include:
  • Supervision and grievance redressal regarding HFCs
  • Financing
  • Promotion and Development.
• The general superintendence, direction, and management of the affairs and business of NHB vest in its Board of Directors.
• Head Office: New Delhi
• NHB RESIDEX: It is the country’s first official housing price index (HPI). It captures movements in the prices of residential real estate prices. 

Q1: What are All India Financial Institutions (AIFIs)?

AIFIs are specialized institutions established to provide long-term finance to various sectors of the economy. Unlike commercial banks, AIFIs do not accept deposits from the public. They focus on specific sectors such as agriculture, industry, infrastructure, and housing, among others. These institutions are regulated and supervised by the Reserve Bank of India (RBI) and other relevant regulatory authorities.

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