The National Housing Bank Act, 1987

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The National Housing Bank Act was passed on 23rd December 1987, Act enacted to constitute a bank known as the National Housing Bank with its principal objective to provide housing financial institutions and to support other financial institution, Act to fulfill its objectives consists of 57 Sections. Central Government by notification established the National Housing Bank under Section 3 which has its head office at Bombay or at any other place as Reserve Bank may think. The National Housing Bank establishes offices and branches at any place in India or at any other place outside India with the previous approval of the Reserve Bank of India. There would be a paid up of about three hundred and fifty crores  of rupees as Capital to the Bank  and when the capital of the Bank increases it may give the capital to Reserve Bank, Central Government, other public banks and other housing financial institutions.

Board of Directors are appointed under Section 5 of Act to look after the maintenance, superintendence and matters relating to business of the National Housing Bank and Board must act on the business principles while discharging the functions laid under the Act. Board of directors consists of more than fifteen members as laid down in Section 6 with Chairman, Managing directors and other directors. All the members of the Board shall be appointed by the Central Government with consulting Reserve Bank and director. All the members of the Board meet at specified time and place as they deem fit to discuss the matter of their business transactions, all questions regarding business will answer with the majority of votes.

Under section 12, Board to fulfill its objectives laid under Act or to perform any additional work can constitute an Executive Committee with certain number of directors. Executive Committee deal with functions only specified it to by the Board. And member of the Committee can at any time and place as specified and observe the rules and regulation in relation to the transaction of business. National Housing Bank as dealt under Section 14 as deals in transacting all kind of business and it includes implementing and establishing housing finance institutions, undertaking house mortgage institutions, accepting deposits as voluntary deposits as specified in Voluntary Deposits (Immunities and Exceptions) Act, 1991,and relates to promoting and implementing schemes and guidelines to the housing finance institutions.

Under Section 15 of the Act, National Housing Bank to exercise the functions laid has power to borrow money or grants from the Central Government, authorities and other financial institutions. Bank has authority to sell bonds and debentures with or without the proper guarantee of Central Government, and Central Government by receiving the request made by Bank or by discretion may guarantee the bonds of Bank. Wherein case of any default of loan or advance made, Bank instituted under 18 of the Act has power to acquire any property or land by transfer in relation to the loan or advance made in behalf. Other than acquiring rights, Bank has power to transfer rights in relation to loan or advance made , National Housing Bank acts as the trustee as held in Section 3 of the Indian Trusts Act, 1882 for the transferee  all the rights vests with the Bank with regard to the loan be transferred to authority as
Bank may deem fit.

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As per Section 18 A, All instrument in form of debt or certificate given for granting loans which been issued by National Housing Bank or any other housing finance institutions under Bank be exempted from registration as specified in Section 17 of Registration Act, 1908. Bank under Section 21 has access to records which relate to the Bank or any other financial institution and it has authority under Section 24 to inspect the institutions for the proper functioning of the institution. Bank in considering the general public has power to publish any information regarding credit and other information as specified in Section 26. Bank also acts as a advisory authority to Central and State Governments in matters relating to the policies and implementation of programmes for the growth of housing finance institutions.

Housing finance institution been constituted under Section 29 of the Act to deal with the matters pertained to house finance, and every housing finance under Act must carry forward with provision the business in India with the criteria as it must invest as per the securities and it should create a reserve fund and transfer of fund should not be below twenty five percent. Housing Bank under Section 31 has power to collect information from all housing finance institutions and to give directions relating to the matter of depositions and statements made thereon, every housing finance institutions provided to furnish the information as required by National Housing Bank as specified in Section 32 and duty casts on auditors under Section 33 to check whether the information regarding statements and depositions furnished to National Bank or not. Based on the Statements made under Section 33 and report of inspection under Section 34, Bank has power to exempt any housing finance institution under Section 35B.

Central Government in consultation with Bank can appoint recovery officer to make recovery of loan or any sums or to possession of any property pledged or mortgaged. There be a Appellate Tribunal called as Housing Finance Institutions Debt Recovery Appellate Tribunals established by the central Government to exercise the functions and powers conferred. Tribunal consists of presiding officers and other staff, Tribunal entertains the appeals made against the order of recovery officer and the members of the Tribunal deemed as the public servants under Section 21 of Indian Penal Code. National Bank to settle all its accounts shall prepare a balance sheet on every thirteenth day of June every year and all the accounts been audited by the auditors comes under the term as specified in Section 226(1) of Companies Act, 1956. Under Section 47, Every director indemnified by National Bank for losses and expenditures incurred by him under the course of employment, and not only persons any companies who make offences under Act be liable and punished accordingly for act done.

As Act been a beneficial one it needs transparency in every stages of process. As India been a populated country it consists of both educated and illiterates, Bank constituted under Act though has fulfilled certain objectives laid by maintaining a proper co-operation in every financial institution constituted it lacks responsibility towards its customers by regulating improper guidelines.

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by Priyadarshini Chandrasekar