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BUSINESS OF THE NATIONAL HOUSING BANK


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14. Business of the National Housing Bank.- 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; 

11[
(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; 

12 [(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;] 

13 [(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; 

14 [(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.
15. Borrowings and acceptance of deposits by National Housing Bank.- (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 15[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 16[such period and] on such terms as may generally or specially be approved by the Reserve Bank;
17 [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 -
18 [(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.

16. Loans in foreign currency.- (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.

19[16A. Assistance to borrower when to operate or a charge in the property offered as security.- (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.

16B. Amount and Security to be held in trust.- (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.]

17. Power to transfer rights.- 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.

18. Power to acquire rights.- The National Housing Bank shall have the right to acquire, by transfer or assignment, the rights and interests of any 20[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.
21[18A. Exemption from registration.- 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.

18B. Recovery of dues as arrears of land revenue.- 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.]

19. Power to impose conditions for accommodation.- In entering into any transaction under this Chapter with any borrowing 22[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.

20. Power to call for repayment before agreed period.- Notwithstanding anything to the contrary contained in any agreement, the National Housing Bank may, by notice in writing, require any borrowing 22[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 22[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 22[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.

21. National Housing Bank to have access to records.- (1) The National Housing Bank shall have free access to all such records of any 22[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 22[institution] or the refinancing of any loan or advance made to such person by that 22[institution].

22. Validity of loan or advance not to be questioned.- 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 22[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.

23. National Housing Bank not to make loans or advances against its own bonds or debentures. - The National Housing Bank shall not make any loan or advance on the security of its own bonds or debentures

24. Power to inspect.- (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 22[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 22[institution] as the said officer may require of him.

25. Power to collect credit information.- (1) The National Housing Bank may, for the purpose of the efficient discharge of its functions under this Act, at any time direct any 22[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 22[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.

26. Power to publish information.- 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.

27. Advisory services.- 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.