Frequently Asked Questions

 
Registration
Acceptance of Deposits
Regulation
Other FAQs
 
 
 
Registration
 

FAQ

1        What is a Housing Finance Company (HFC)?

 

A Housing Finance Company is a company registered under the Companies Act, 1956 (1 of 1956) which primarily transacts or has as one of its principal objects, the transacting of the business of providing finance for housing, whether directly or indirectly.

 

2        Whether an HFC requires registration from NHB apart from Registrar of Companies?

 

Yes. An HFC also requires registration with NHB for commencing or carrying on the business of housing finance.

 

3        Is it necessary that every HFC should be registered with NHB?

 

In terms of Section 29A of the National Housing Bank Act, 1987, no Housing Finance Company shall commence or carry on the business of a housing finance institution without -

(i)      Obtaining a certificate of registration from National Housing Bank issued under  Chapter V of the said Act, and

(ii)    Having the net owned fund of twenty five lakhs* rupees or such other higher amount, as the National Housing Bank may, by notification, specify.

 

*NHB, in exercise of its powers have from time to time specified the net owned fund requirements and w.e.f. April 1, 2014, the said requirement is Rs. 10 crore.

 

4        Whether an HFC can conduct business without obtaining certificate of registration from NHB?

 

No. In terms of section 29A of the National Housing Bank, 1987, HFCs cannot conduct business of housing finance without obtaining a Certificate of Registration (CoR) from NHB. Conduct of business without obtaining certificate of registration is an offence punishable under the provisions of the National Housing Bank Act, 1987. NHB can also file application for winding up of such HFCs, under section 33B of the said Act.

 

5        What are the requirements for commencing housing finance business by an HFC under the NHB Act?

 

For commencing the housing finance business, an HFC is required to have the following in addition to the requirements under the Companies Act, 1956:

(i)      Certificate of registration from NHB

(ii)    Minimum net owned fund of Rs. 1000 lakhs ( w.e.f. 01.04.2014)

 

6        What are the requirements for registration with NHB?

 

A company registered under the Companies Act, 1956 and desirous of commencing business of a housing finance institution, should comply with the following-

(i)      either it should primarily transacts or has as one of its principal objects of transacting the business of providing finance for housing, whether directly or indirectly; and

(ii)    it should have a minimum net owned fund of Rs. 10 crore.

NHB, after its satisfaction on the fulfillment of following conditions provided under sub-section (4) of Section 29A of the National Housing Bank Act, 1987 by a company, may grant a Certificate of Registration.

(i)      HFC is or shall be in a position to pay its present or future depositors in full as and when their claims accrue;

(ii)    Affairs of the HFC are not being or are not likely to be conducted in a manner detrimental to the interest of its present or future depositors;

(iii)   General character of the management or the proposed management of the HFC shall not be prejudicial to the public interest or to the interests of its depositors;

(iv)  HFC has adequate capital structure and earning prospects;

(v)    Public interest shall be served by the grant of certificate of registration to the HFC to commence or carry on the business in India;

(vi)  Grant of certificate of registration shall not be prejudicial to the operation and growth of the housing finance sector of the country; and

(vii) Any other condition, fulfillment of which in the opinion of the NHB, shall be necessary to ensure that the commencement of or carrying on the business in India by a HFC shall not be prejudicial to the public interest or in the interests of the depositors.

 

7        What is meant by Net Owned Fund (NOF)?

 

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 –

(i)     investments of such institution in shares of-

·         its subsidiaries;

·         companies in the same group;

·         all other housing finance institutions which are companies; and

(ii)   the book value of debentures, bonds, outstanding loans and advances (including hire-purchase and lease finance) made to, and deposits with,-

·         subsidiaries of such company; and

·         Companies in the same group, to the extent such amount exceeds ten per cent. of (a) above;

“subsidiaries” and “companies in the same group” shall have the same meanings assigned to them in the Companies Act, 1956.

 

8        What is the procedure for application to the NHB for Registration?

 

The applicant company is required to submit a physical copy of the application (in duplicate) along with the essentials documents to the Head Office of the National Housing Bank. Further, Company is also required to attach a Demand Draft for Rs. 10,000 favoring National Housing Bank payable at New Delhi. The application can be viewed and downloaded from NHB’s website http://www.nhb.org.in/Regulation/applicaioncr.php. Application should be made in the prescribed form only.

 

9        What are the essential documents required to be submitted along with the application form to NHB?

 

A filled-in physical copy of the application form (in duplicate) along with necessary enclosures stated in our websitehttp://www.nhb.org.in/Regulation/applicaioncr.php to submitted to the Head Office of NHB. An indicative checklist of the documents required to be submitted is also provided under the heading “Instructions for filling up the Application” in the same page.

 

10    What are the different categories of HFCs registered with NHB?

 

HFCs are categorized in terms of the type of liabilities, by NHB, into Deposit and Non-Deposit accepting HFCs and are issued Certificate of Registration accordingly.

 

11    Where can one find list of Registered HFCs and instructions issued to HFCs?

 

The list of registered HFCs is available on NHB’s website and can be viewed at

(i)      http://www.nhb.org.in/Regulation/RegisteredCompanies.php; and

(ii)    http://www.nhb.org.in/Regulation/NonValidCompanies.php.

 

12    Where can one find list of companies whose application for certificate of registration have been declined/ rejected/ rejected as withdrawn/ cancelled by NHB?

 

The list of such companies is available on NHB’s website and can be viewed at http://www.nhb.org.in/Regulation/RejectedCompanies.php

 

13    Whether an appeal lies against the order of rejection of certificate of registration and if so with whom?

 

Yes. Such HFC can appeal to the Central Government within a period of 30 days from the date on which such order of rejection is communicated to it.

 

14    Whether NHB can cancel the Certificate of Registration granted to a HFC, and if so under what circumstances?

 

In terms of sub-section (5) of Section 29 A of the National Housing Bank Act, 1987, NHB may cancel a certificate of registration granted to a housing finance company, subject to certain provisions, if such company

(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) of Section 29A of the National Housing Bank Act, 1987; or

(iv)  fails-

(a)    to comply with any direction issued by the National Housing Bank under the provisions of Chapter V of the National Housing Bank Act, 1987; 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 Chapter V of the National Housing Bank Act, 1987; 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 V of the National Housing Bank Act, 1987 and such order has been in force for a period of not less than three months.

 

15    What are the appeal procedures available to a company, aggrieved by the order of cancellation of certificate of registration or rejection of application for registration?

 

An aggrieved company may prefer an appeal (in terms of sub-section (7) of Section 29 A of the National Housing Bank Act, 1987), 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.

 

16    HFCs are doing functions similar to banks as banks also provides housing loans. What is difference between banks & HFCs?

 

HFCs lend and make investments and hence their activities are akin to that of banks. However, there are a few differences as given below:

(i)      HFCs cannot accept demand deposits;

(ii)    HFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;

(iii)   deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of HFCs, unlike in case of banks.

 

17    Are banks providing the housing finance under the preview of NHB?

 

The banks fall under the regulatory purview of Reserve Bank of India and are bound by the regulations framed by RBI. NHB, therefore, regulates and supervises only the HFCs.

 
 
Acceptance of Deposits
 

1.   What is a public deposit ?

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, 2001. However, 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.

2.   Can all HFCs accept public deposits ?

For acceptance of public deposits 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.

3    Is there any ceiling on the maximum amount of public deposit which can be accepted by an HFC?

Yes. HFCs having credit rating from approved credit rating agencies not below ‘A’ and complying with all prudential norms requirements can accept deposit not exceeding five times of its net owned fund. The HFCs having no credit rating can accept deposit only upto two times of its net owned fund or rupees ten crores whichever is lower provided such HFC complies with all prudential norms and also has capital adequacy ratio of not less than fifteen percent as per the last audited balance sheet.

4.   Is credit rating compulsory for acceptance of public deposits by an HFC?

No. The HFC having credit rating can accept more deposits as per the conditions laid down for acceptance of deposits in such a case as compared to an HFC without such rating. For detail please see answer to Question No. 3.

5. What are the credit rating agencies approved for the above purpose ?

The following credit rating agencies have been approved for the purpose

  1. The Credit Rating Information Services of India Ltd. (CRISIL)
  2. ICRA Ltd.
  3. Credit Analysis and Research Limited (CARE)
  4. FITCH Ratings India Pvt. Ltd.

6.   Is there any ceiling on the rate of interest which can be offered by an HFC on public deposits ?

The Housing Finance Companies (NHB) Directions, 2001 provide for ceiling on the maximum rate of interest which can be offered by an HFC on public deposits. The present ceiling is twelve and half per cent per annum compounded at intervals not shorter than monthly rests. However, there is no stipulation with regard to the minimum rate of interest required to be offered on public deposits by an HFC. 

7. Is there any limitation/ restriction on the period for which public deposit can be accepted by a HFC?

In terms of the Housing Finance Companies (NHB) Directions, 2001, HFCs can accept public deposits for periods of one year and above and  upto seven years only.

8. Whether a depositor can withdraw his deposit prematurely. If so, are there any conditions attached to the same ?

Subject to any contract to the contrary  an HFC, on a request being made by a depositor, may consider making premature payment of the deposit subject to the following:

  1. No deposit can be repaid within three months from the date of its acceptance.
  2. No interest shall be paid if the deposit is repaid within six months from the date of deposit.
  3. Where deposit has run from six months to one year the interest not exceeding ten per cent  can be paid.
  4. Where the deposit has run for a period of twelve months, the rate of interest applicable shall be one percentage point less than that HFC’s rate applicable for the period for which the deposit has actually run.
  5. In case of death of the depositor the deposit may be repaid with interest at the contracted rate upto the date of repayment of such deposit.

9.   Can an HFC on its own repay the deposit prematurely ?

No, acceptance of public deposit is a contract between the HFC and the depositor for a definite period of time. However, any novation of the contract has to be mutually agreed between the parties and should be in conformity with the provisions of Housing Finance Companies (NHB) Directions, 2001.

10. Are public deposits of HFCs guaranteed by NHB ?

No. The depositor is advised to satisfy himself about the financial position and all relevant aspects before placing his deposit with the HFC.

 A person making public deposits with HFCs should satisfy himself that it holds a valid certificate of registration for accepting public deposits from NHB. NHB while issuing certificate of registration to an HFC specifically mentions whether or not it can accept public deposits.

11. Can an HFC provide nomination facility to its depositors ?

Yes. Such facility is permissible to the depositors of HFCs.

12. What are the remedies available to a depositor when the HFC does not re-pay the deposits on maturity ?

The depositor can file a civil suit for recovery of the amount of deposit. He can also make a complaint to the Consumer Forums set up under the Consumer Protection Act, 1986. The depositor should also bring such cases to the notice of NHB for taking action against the defaulting companies under the provisions of the NHB Act. On being satisfied that the company has defaulted in repayment of deposits NHB may issue directions prohibiting it from acceptance of further deposits and alienation of its assets. NHB may also impose financial penalties and take action for imposition of other penalties. NHB may also file winding up petition against such companies.   

13. What details is an HFC required to furnish in the application form soliciting public deposits?

While soliciting public deposits, an HFC has to indicate, inter-alia, the following:

  • Particulars of the specified category of the depositors,
  • Credit rating assigned for its deposits,
  • Information relating to aggregate exposure to group companies and other entities in which Directors of the HFC/ HFC have substantial interest ,
  • Other statements pertaining to Redressal fora available in case of  any deficiency, effect of non-payment of deposits, financial position of the company, regulatory framework etc. as detailed in Paragraph 6 to the Housing Finance Companies (NHB) Directions, 2001,
  • Particulars specified in the Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, 1977, made under section 58A of the Companies Act, 1956 (1 of 1956).
 
 
Regulation
 

1.   What are the provisions for regulation of HFCs under the National Housing Bank Act, 1987?

The provisions for regulation of the HFCs as provided under the NHB Act, 1987 are:

  • Requirement of Registration and Net Owned Fund
  • Maintenance of percentage of assets in specified securities
  • Creation of Reserve Fund by the HFCs
  • Regulation or prohibition of issue of prospectus or advertisement soliciting deposits
  • Determination of  Prudential Norms for HFCs
  • Collection of information as to deposits and to give directions
  • Issue of directions to the auditors of the HFCs relating to financial statements and disclosure requirements
  • Prohibition of acceptance of deposits and alienation of assets
  • Penalty for violation of the provisions of the Act or the directions issued thereunder. Filing  of winding up petition against erring HFCs.

2.   Are there any directions issued by NHB to HFCs under the NHB Act, 1987?

Yes, NHB has issued general directions to HFCs from time to time. The Directions currently in force are known as Housing Finance Companies (NHB) Directions, 2001. . These Directions relate to Acceptance of deposits by HFCs, Prudential Norms relating to Income Recognition, Capital Adequacy, Classification of assets, Credit Concentration etc. They also contain directions to auditors of the HFCs regarding disclosure requirements.  

3.   What is the methodology adopted by NHB to regulate the HFCs under the NHB Act, 1987 and Housing Finance Companies (NHB) Directions, 2001?

The methodology adopted by NHB broadly comprises the following:

  1. Entry level regulation, i.e., scrutiny of the HFC at the time of Registration
  2. Off-site surveillance, i.e., through analysis of the information, return, periodicals etc. filed by the HFCs from time to time.
  3. On-site inspections, i.e., visit by the officers of the NHB to the offices of HFCs and verification/ scrutiny of the books of accounts, returns, etc.
  4. Constant interaction with other regulatory authorities  

4.   What are the periodical returns, statements, etc. required to be submitted by the HFCs to NHB?

The returns/ statements required to be submitted by the HFCs to NHB are enumerated below:

  • Annual Return
  • Half-yearly Return on Prudential Norms
  • Quarterly Return on maintenance of Liquid Assets
  • Auditor’s Certificate on annual basis certifying the capability of the HFC to repay deposits
  • Copy of financial statements / Annual Report
  • Returns on changes pertaining to address of the registered office of the HFC, its Directors etc.
  • Filing a copy of the advertisement soliciting Public Deposits or statement in lieu thereof

5.   What action can NHB take against the HFCs not complying with the provisions of the Act or the Housing Finance Companies (NHB) Directions, 2001?

As per the NHB Act, 1987, NHB is empowered to take the following actions:

  1. Issuing specific directions prohibiting acceptance of deposits and alienation of assets
  2. Cancellation of certificate of registration.
  3. Filing of applications for winding up petition
  4. Imposition of financial penalties  on the HFC and its principal officers
  5. Filing of complaints before the Magistrate for imposition of penalties

6.   What are the provisions under the NHB Act, 1987 and Housing Finance Companies (NHB) Directions, 2001 for safeguarding the interest of the depositors?

Some of the safeguards under the NHB Act, 1987 and Housing Finance Companies (NHB) Directions, 2001 are enumerated below:

  1. Imposition of ceiling on the amount that can be accepted by an HFC
  2. Imposition of ceiling on the rate of interest on deposits
  3. Provision for nomination facility
  4. Requirement of disclosures to the depositors
  5. Imposition of ceiling on brokerage to be paid by HFC for raising deposits
  6. Prohibition on alienation of assets in case of default in repayment of deposits
  7. Requirement of maintenance of Liquid Assets by HFC
  8. Creation of Reserve Fund
  9. Collection of data periodically to verify compliance with the provisions of the NHB Act and directions by an HFC to ensure its soundness
 
Other FAQs

Frequently Asked Questions



1.         What is the role of NHB?

NHB regulates the housing finance system of the country, extends refinance to different primary lenders and lends directly in respect of projects undertaken by public housing agencies for housing          construction and development of  housing related infrastructure.

2.         Is NHB a Government owned Bank or a private Bank?

            National Housing Bank is a statutory organization set up on July 9, 1988 under    the National Housing Bank Act, 1987. NHB is wholly owned by Reserve Bank of             India, which contributed the entire paid-up capital.

3.         Does NHB deal directly with public?

            No.

4.         Whether NHB provides direct loans?
NHB grants direct loans to Public Agencies directly or in partnership with private developers under PPP model  to development of housing projects as per the Schemes/Guidelines of NHB.

5.         Can I get individual housing loan/mortgage loan/reverse mortgage loan from    National Housing Bank?
NHB does not grant any loan directly to individual.

6.         What is a Housing Finance Company (HFC)?

A Housing Finance Company is a company registered under the Companies Act, 1956 (1 of 1956) which primarily transacts or has as one of its principal objects, the transacting of the business of providing finance for housing, whether directly or indirectly.

7. What are the requirements for commencing housing finance business by an HFC under the NHB Act?

For commencing the housing finance business, an HFC is required to have the      following in addition to the requirements under the Companies Act, 1956:

  1. Certificate of registration from NHB
  2. Minimum net owned fund of Rs. 1000 lakhs ( w.e.f. 01.04.2014)

8.         What is the procedure for application to the NHB for Registration?
           The applicant company is required to submit a physical copy of the application   (in duplicate) along with the necessary documents to the Head Office of the National Housing Bank. The application can be viewed and downloaded     from    NHB’s website http://www.nhb.org.in/Regulation/applicaioncr.php      

Application should be made in the prescribed form only.

9.         Is it necessary that every HFC should be registered with NHB?

In terms of Section 29A of the National Housing Bank Act, 1987, no Housing Finance Company shall commence or carry on the business of a housing finance institution    without -

  1. obtaining a certificate of registration from National Housing Bank issued under Chapter V of the said Act, and
  2. having the net owned fund of twenty five lakhs rupees or such other higher amount, as the National Housing Bank may, by notification, specify.

            NHB, in exercise of its powers have from time to time specified the net owned fund requirements and w.e.f. April 1, 2014, the said requirement is Rs. 10 crore

10.       What are the different categories of HFCs registered with NHB? Where can one find list of Registered HFCs and instructions issued to HFCs?

HFCs are categorized in terms of the type of liabilities, by NHB, into Deposit and Non-Deposit accepting HFCs and are issued Certificate of Registration    accordingly. The list of      registered HFCs is available on NHB’s website and can be viewed at

  1.       http://www.nhb.org.in/Regulation/RegisteredCompanies.php; and
  2.       http://www.nhb.org.in/Regulation/NonValidCompanies.php.

11.       What is the Grievance Redressal Mechanism in place for customers of HFCs regulated by NHB?

            Complainant can lodge the complaint with the respective housing finance company        (HFC) as envisaged in the Fair Practices Code adopted by the concerned HFC. An online (24x7) Grievance Registration and Information Database System (GRIDS) has been implemented for lodging the complaint by the complainant against HFCs and its status tracking for efficient and effective disposal. Further, if the complainant is still not satisfied with the outcome or his complaint is not resolved within a given period, he/she can approach other forms of legal remedies available.

12.       List of HFCs which can take possession of the property under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in case of defaults in repayment of loans?

            As on 25-07-2014, the list of HFCs notified as ‘Financial Institution’ under sub-      clause(iv)       of clause (m) of sub-section (1) of Section 2 of the Securitisation and     Reconstruction of    Financial Assets and Enforcement of Security Interest Act,         2002, by the Government of India, Ministry of Finance, Department of          Financial Services are as below:`


S.N.

Name of HFC

1. 

Can Fin Homes Limited

2. 

Cent Bank Home Finance Limited

3. 

Dewan Housing Finance Corporation Limited

4.  

DHFL Vysya Housing Finance Limited

5.  

GIC Housing Finance Limited

6. 

GRUH Finance Limited

7.  

Housing Development Finance Corporation Limited

8.  

ICICI Home Finance Company Limited

9.  

Ind Bank Housing Limited

10.  

India Infoline Housing Finance Limited

11.  

Indiabulls Housing Finance Limited

12.  

L & T Housing Finance Limited

13 

LIC Housing Finance Limited

14 

Manipal Housing Finance Syndicate Limited

15 

National Trust Housing Finance Limited

16 

PNB Housing Finance Limited

17 

Religare Housing Development Finance Corporation Limited

18 

Repco Home Finance Limited

19 

Sundaram BNP Paribas Home Finance Limited

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition, HUDCO is also covered under the above provisions, since it is anotified public financial institution.

13.       Where can one find list of companies whose application for certificate of registration have been declined/ rejected/ rejected as withdrawn/ cancelled by NHB?

The list of such companies is available on NHB’s website and can be viewed at
http://www.nhb.org.in/Regulation/RejectedCompanies.php

14.       Whether NHB can cancel the Certificate of Registration granted to a HFC, and   if so under what circumstances?
            In terms of sub-section (5) of Section 29 A of the National Housing Bank Act, 1987, NHB may cancel a certificate of registration granted to a housing finance company, subject to certain provisions, if such company

  1.      ceases to carry on the business of a housing finance institution in India; or
  2.      has failed to comply with any condition subject to which the certificate of registration    had been issued to it; or
  3.      at any time fails to fulfil any of the conditions referred to in clauses (a) to (g) of     sub-    section (4) of Section 29A of the National Housing Bank Act, 1987; or
  4.      fails-

(a) to comply with any direction issued by the National Housing Bank under the provisions of Chapter V of the National Housing Bank Act, 1987; 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 Chapter V of the National Housing Bank Act, 1987; 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 V of the National Housing        Bank Act, 1987 and such order has been in force for a period of not less than            three months

15.       What are the appeal procedure available to a company, aggrieved by the order of cancellation of certificate of registration or rejection of application for     registration?

            An aggrieved company may prefer an appeal (in terms of sub-section (7) of Section 29 A of the National Housing Bank Act, 1987), 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.

16.       HFCs are doing functions similar to banks as bank also provides housing           loans. What   is difference between banks & HFCs?

HFCs lend and make investments and hence their activities are akin to that of banks. However, there are a few differences as given below:

  1.      HFCs cannot accept demand deposits;
  2.      HFCs do not form part of the payment and settlement system and cannot issue     cheques      drawn on itself;
  3.      deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of HFCs, unlike in case of banks.

17.       How to avail refinance from NHB?

Refinance Schemes of NHB as applicable to various category of Primary Lending Institutions (PLIs) viz, Scheduled Banks (including RRBs),  HFCs, ACHFS and ARDBs etc.,  along with the eligibility conditions to avail refinance are available at NHB's website. PLIs desirous of availing refinance may send their applications as per the prescribed format for sanction of annual refinance limit (July-June). 

18.       What are the indicative rates of Refinance?

Generally, interest rate on refinance is determined at the time of disbursement at the mutual consent of NHB and PLI except for such schemes where interest rates are pre-determined and available on NHB's website and also communicated through circulars. 

19.       Does National Housing Bank extend loan facilities to private developers for       construction of  flats/apartments?

No.

20.       Rates of Interest/tenure for NHB Sunidhi and Suvridhi Deposit Schemes

The relevant details are available on following links:

  • http://nhb.org.in/Deposit_Scheme/SALIENT_FEATURES.php
  • http://nhb.org.in/Deposit_Scheme/SALIENT_FEATURES_NHB_SUVRIDDHI.php

21.       Whether tax saving deposit is available with NHB?

            NHB SUVRIDDHI (Tax Saving) Term Deposit Scheme: It is a tax saving deposit scheme for individuals & HUFs U/S 80 C  of Income Tax Act. The minimum deposit in the scheme is Rs. 10,000 and thereafter in multiple of Rs. 10,000 with a fixed maturity of 60 months. Individuals & HUFs can invest maximum  Rs. 1,00,000 in the scheme. The relevant details of the scheme are available on the link:

http://nhb.org.in/Deposit_Scheme/SALIENT_FEATURES_NHB_SUVRIDDHI.php

22.       Why does NHB deduct TDS with a ceiling of Rs.5000/- p.a. whereas it is Rs.10,000/-p.a. for banks?

As per Section 194A of the Income Tax Act, TDS with a ceiling of Rs.10,000 is deducted in case of following Institutions:

  1. where the payer is a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution, referred to in section 51 of that Act);
  2. where the payer is a co-operative society engaged in carrying on the business of banking;
  3. on any deposit with post office under any scheme framed by the Central Government and notified by it in this behalf;
And in any other case TDS is deducted with a ceiling of Rs.5000/p.a.. As NHB does not fall in any of the above stated category of Institutions, it deducts TDS with a ceiling of Rs.5000/- p.a.

23.       Does NHB extend RML?

NHB does not extend loans directly to individuals as per the provisions of the National Housing Bank Act, 1987.

24.       Who are eligible for RML facility?

RML can be availed by Senior citizens of India (above 60 years) against the mortgage of the house owned and occupied by them, subject to compliance with the terms and conditions of the RML product offered by the Primary Lending Institutions (PLIs).

25.       What are the income tax rules on RML and RMLA ?

All payments under RML are exempt from income tax under Section 10(43) of the Income-tax Act, 1961. The Government of India have vide Notification No.79/2013/F.No.149/54/2013-TPL dated October 07, 2013 amended the Reverse Mortgage Scheme, 2008 to include RMLA in the Reverse Mortgage (Amendment) Scheme, 2013, also eligible for tax exemption.

26.       Is there any standard valuation method for availing loan under RML?

RML is being extended by the PLIs as per their commercial judgment and risk perception, in accordance with their operational processes and procedures.    

27.       Can I rent out the property mortgaged under RML/RMLeA?

PLIs reserve the discretion to extend RML as per their commercial judgment and risk perception, in accordance with their operational processes and procedures.

28.       Which Banks give loans on RML?

RMLs are extended by Primary Lending Institutions (PLIs) viz. Scheduled Banks and Housing Finance Companies (HFCs) registered with NHB.

29.       What is Credit Risk Guarantee Fund Trust Fund for low housing?

Credit Risk Guarantee Fund Scheme for Low Income Housing (CRGFS) was formulated by MoHUPA, Govt. of India in consultation with DFS, MOF. The objective of the scheme is to provide credit guarantee support to Collateral        free/third-party guarantee free housing loans up to Rs.5 lakhs extended by eligible lending institutions for Low Income Housing in urban areas. NHB has been    mandated to manage the Fund Trust under the scheme, set up by    MoHUPA, Govt. of India.

30.       Whether individuals can make use of Credit Guarantee Fund Scheme for Low Income Housing by insuring his/her loan against default?

Individual borrowers belonging to the Economically Weaker Section (EWS) or Low Income Housing Group (LIH) of the population and eligible borrowers, forming a group or housing society of at least 20 members in urban areas, are   eligible to get guarantee cover under the Scheme for housing loans upto  5 Lakhs. However, eligible individual borrowers as defined cannot directly    approach the Trust to get Guarantee Cover under the scheme. The eligible lending institutions will have to apply for Guarantee Cover for the loans sanctioned and disbursed by them to such eligible borrowers.

 

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