Trends in Housing Finance in India

Report on Trend
and
Progress of Housing
in India
2014
83
Report on Trend and Progress of Housing in India 2014
84
List of Chapters
No.
1
Current Macro and Micro Economic Condition and Status of Indian Economy
1.1
1.2
1.3
1.4
Page
No.
Contents
Global Economy Outlook
Indian Economy
Indian Economy: Prospects for FY 2014-15
NHB RESIDEX: The Residential Property Price Index
91
94
96
97
Overview of the Indian Housing Sector

2.1 Importance of Housing
2.2 Issues Concerning Housing in India
2.3 The Indian Housing Finance Market
100
102
103
Policy Environment for Housing and Housing Finance

3.1 Concept of Affordable Housing
3.2 The Role of Different Agencies towards Affordable Housing
3.3 Recent Housing Schemes Implemented by the Government of India
3.4 Select State Level Initiatives in Housing
107
107
109
113
Role of National Housing Bank

4.1 Role of National Housing Bank
4.2 Performance of National Housing Bank (July 01-June 30)
4.3 Resource Mobilization
4.4 Refinance Operations
4.5 Sanctions and Disbursements through Direct Finance
4.6 Regulation and Supervision
4.7 Promotion and Development
4.8 Capacity Building
120
122
123
125
132
133
134
138
Operations and Performance of Housing Finance Institutions

5.1 Number of Housing Finance Companies
5.2 Financial Profile of HFCs
5.3 Key Performance Indicators of HFCs
5.4 Borrowing Profile of HFCs
5.5 Public Deposits with HFCs
5.6 Asset Profile of HFCs
5.7 Disbursements of Housing Loans by HFCs, based on type of Borrowings
141
142
143
145
145
147
148
Institutional Performance viz-a-viz Housing Finance

6.1 Categories of Institutions Providing Housing Finance
6.2 Scheduled Commercial Banks and their Performance in Housing Finance
6.3 The National Co-operative Housing Federation of India
6.4 Microfinance Institutions
156
156
159
161
Area of Focus: Sustainable Energy Efficient Housing

7.1 Introduction
7.2 Energy Consumption in Residential Buildings
7.3 Towards achieving energy efficiency
7.4 Steps taken by National Housing Bank
7.5 Benefits to Various Stakeholders Under the Programme
7.6 Building Energy Efficiency
162
163
164
166
167
167
Way Forward
170
85
List of Tables
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
Page No.
Contents
Overview of the World Economic Outlook Projections
Quarterly Estimate of GDP at Factor Cost in Q1 (April-June) of 2014-15 (at 200405 prices)
City-wise Housing Price Index for the quarterApril-June, 2014
Estimated Housing Shortage in India : 2012-2017
Financial Highlights for the last Six Years
Income expenditure and profitability trend in the last four years
Total Outstanding Borrowing as on June 30, 2014
Refinance Sanctions and Disbursements for the years 2012-13
PLI -wise break-up of Cumulative Disbursements as on June 30, 2014
Trend in NHB's Refinance Disbursements between 1999 and 2014
The tenure-wise breakup of disbursements during 2012-13 and 2013-14
Disbursements made during 2013-14 and outstanding as on 30.06.2014 based on
type of interest rate
Break-up of refinance disbursements in 2013-14, on the based of size of underlying
individual housing loans
Area-wise trend in Refinance disbursed against the Individual Housing Loans
between 2009 and 2014.
Scheme-wise trend in Disbursements under NHB's Refinance between 2011 and
2014
Trend in Refinance Disbursements made to different categories of Primary
Lending Institutions between 2009 and 2014
Trend in disbursements made by NHB under Energy Efficient Housing Refinance
Scheme
Trend in allocation and utilization of RHF
Allocation and utilization of UHF
Trend in Project Finance Disbursements made by NHB between 2002 and 2014
NPV subsidy disbussed by NHB between 2009 and 2014, under ISHUP
Disbursement of subsidy to PLIs, under 1% Interest Subvention Scheme between
2010 and 2013
State-wise and income group-wise bifurcation of EWS and LIG loan accounts
against which the Trust has made the Guarantee cover to MLIs
Trend in performance of GJRHFS, since inception
Trainings conducted by NHB in 2013-14
Trend in Key Financial Indicators of HFCs for the last three years
Trend in Performance of Public and Private Ltd. HFCs for the last three years
Trend in Performance of Public Deposit accepting HFCs with Non-accepting
HFCs for the last three years
Trend in Performance of Sponsored HFCs with other HFCs for the last three years
Trend in Composition of Borrowings of HFCs for the last three years
Trend in Outstanding Loans & Advances, and Investments of HFCs for the last
three years
Comparison of Housing Loans with Total Loans of HFCs
Trend in Disbursements of Housing Loans of HFCs to individuals for the last three
years Acquisition/Construction of New Houses
86
92
95
99
100
122
122
123
125
126
127
128
128
128
129
129
129
131
131
132
133
135
135
136
137
139
142
143
144
144
145
147
148
150
34
35
36
37
38
39
40
41
42
43
44
45
Trend in Disbursements of Housing Loans by HFCs to Individuals for the last three
years Upgradation (including major repairs)
Trend in Disbursements of Housing Loans by HFCs to Individuals for the last three
years Acquisition of Old/Existing Houses (Resale)
Trend in Total Disbursements of Housing Loans by HFCs to Individuals for the last
three years
Disbursements of Housing Loans by HFCs to Individuals in 2013-14, as per
Income Category
Trend in HFCs Housing Loan distursements in different States/UTs, as per Urban
and Rural Categories
Trend in Outstanding Housing Loans of SCBs for the last two years
Area-wise Outstanding Housing Loans of SCBs, as on March 31, 2013
Classification of outstanding Housing Loans of SCBs, as per Rate of Interest
Comparison of PSBs Housing Loans for the last two years
Trend in Slab-wise Housing Loans of PSBs for the last two years
Trend in Borrowings, Sanctions and Disbursements of Apex Cooperative Housing
Federations (Cumulative) for the last three years
Trend in Housing Loans Disbursed and Units Constructed by ACHFs : (State-wise)
for the last three years
150
150
151
151
152
157
157
158
158
159
160
160
List of Graphs
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Page No.
Contents
Asia-Changes in Real GDP at Market Prices
Inflation rate in India as per Consumers Price Index (CPI)
Projection of Growth of Urban Population in India
Share of outstanding borrowing of NHB as on June 30, 2014
Refinance Sanctions for the years 2012-13 and 2013-14
Refinance Disbursements for the years 2012-13 and 2013-14
PLI -wise break-up of cumulative disbursements as on June 30, 2014
Trend in NHB's refinance disbursements, between 1999 and 2014
Trend in refinance disbursements made to different categories of primary lending
institutions between 2009 and 2014
Trend in performance of GJRHFS, since inception
Classification of Registered Housing Finance Companies
State/ Union Territory-wise Branches/Offices of Registered HFCs
Trend in Outstanding Resources of HFCs for the last three years
Trend in OutstandingAssets of HFCs for the last three years
Trend in Size-wise Public Deposits of HFCs for the last three years
Trend in Interest rate-wise Public Deposits of HFCs for the last three years
Trend in Maturity-wise Public Deposits of HFCs for the last three years
Trend in Maturity-pattern of Outstanding Housing Loans to Individuals by HFCs
Trend in Disbursements of Housing Loans by HFCs for the last three years, based
on Category of the Borrowers.
Trend in Disbursements of Housing Loans to Individuals by HFCs for the last
three years, based on purpose of utilization.
87
91
94
101
123
125
126
126
127
130
137
141
141
142
143
146
146
147
148
149
149
21
22
23
24
Trend in Outstanding Housing Loans of PSBs

Trend in Consumption of Electricity in India
Sector-wise Consumption of Electricity (Utilities) during 2012-13
Future trend of building sector in India
159
162
163
163
List of Box Items

No.
1
2
3
4
5
6
Contents
Page No.
Excerpts from the Economic Survey 2014-15

Study on Impact of Investments in the Housing Sector on GDP and Employment
in the Indian Economy
Report on "Scaling Up Housing Microfinance" by NHB in collaboration with
IFMR Capital and DFID, UK.
Announcements related to Housing Sector in the Union Budget 2014-15
Grievance Registration and Information Database System (GRIDS)
Design Guidelines for Energy-efficient Multi-storey Residential Buildings by
BEE -Recommendations on energy-efficiency features for consideration at the
design stage of multi-storey residential buildings
97
102
106
109
134
168
List of Pictures
No.
1
2A
3A
2B
3B
4
Contents
Page No.
NHB's Financial Performance at a Glance

Trend in HFCs Disbursements of Housing Loans to Individuals
Trend in HFCs Outstanding Housing Loans to Individuals
Trend in HFCs Disbursements of Housing Loans to Builders
Trend in HFCs Outstanding Housing Loans to Builders
Trend in HFCs Disbursements of Housing Loans Acquisition/ Construction of
New Houses to Individuals
88
122
153
153
154
154
155
eks- eqLrQk
v/;{k ,oa izcU/k funs'kd
Mohammad Mustafa
Chairman & Managing Director
NHB (ND)/ CMD /3985 /2015

April 22, 2015
The Finance Secretary
Government of India
Ministry of Finance
North Block
New Delhi- 110001
Letter of Transmittal
Dear Sir,
In pursuance of provision of Section 42 of National Housing Bank Act, 1987, I have
pleasure in transmitting herewith a copy of the 'Report on Trend & Progress of
Housing in India' 2014.
Yours faithfully,
(Mohammad Mustafa)
Encl: As above
Hkkjrh; fjtoZ cSad

ds laiw.kZ LokfeRo esa
dksj 5&, bafM;k gSfcVsV lsaVj] yks/kh jksM+] ubZ fnYyh&110003

nwjHkk"k lh 011&2464 2722 ihch,Dl 011&2464 9031&35 QSDl % 011&2464 9030
rkj % fuokl cSad bZ&esy % md.mustafa@nhb.org.in
Wholly owned by
Reserve Bank of India
5th Floor, Core 5-A, India Habitat Centre, Lodhi Road, New Delhi-110003
Phone: (D) 011-2464 2722 (PBX) 011-2464 9031-35 Fax : 011-2464 9030
Gram : NIWAS Bank email : md.mustafa@nhb.org.in
cSad fgUnh esa i=kpkj dk Lokxr djrk gS

89
eks- eqLrQk
v/;{k ,oa izcU/k funs'kd
Mohammad Mustafa
Chairman & Managing Director
NHB (ND)/ CMD /3986 /2015

April 22, 2015
The Governor
Central Office Building
Shahid Bhagat Singh Marg
Mumbai - 400 001
Letter of Transmittal
Dear Sir,
In pursuance of provision of Section 42 of National Housing Bank Act, 1987, I have
pleasure in transmitting herewith a copy of the 'Report on Trend & Progress of
Housing in India' 2014.
Yours faithfully,
(Mohammad Mustafa)
Encl: As above
Hkkjrh; fjtoZ cSad

ds laiw.kZ LokfeRo esa
dksj 5&, bafM;k gSfcVsV lsaVj] yks/kh jksM+] ubZ fnYyh&110003

nwjHkk"k lh 011&2464 2722 ihch,Dl 011&2464 9031&35 QSDl % 011&2464 9030
rkj % fuokl cSad bZ&esy % md.mustafa@nhb.org.in
Wholly owned by
5th Floor, Core 5-A, India Habitat Centre, Lodhi Road, New Delhi-110003
Phone: (D) 011-2464 2722 (PBX) 011-2464 9031-35 Fax : 011-2464 9030
Gram : NIWAS Bank email : md.mustafa@nhb.org.in
cSad fgUnh esa i=kpkj dk Lokxr djrk gS

90
Chapter 1
Current Macro and Micro Economic Condition
and Status of Indian Economy
1.1
Global Economy Outlook

1.1.1 Global activity has broadly strengthened and is expected to improve further in 2014-15, with much
of the impetus coming from advanced economies. Inflation in these economies, however, has
undershot projections, reflecting still large output gaps and recent commodity price declines.
1.1.2 As mentioned in the IMF's report on World Economic Outlook-April 2014, global growth picked
up in the second half of 2013, averaging 3 percent, up from 2 percent recorded during the
previous six months. Advanced economies accounted for much of the pick-up, whereas growth in
emerging markets increased only modestly1 . The strengthening in activity was mirrored in global
trade and industrial production. The latest data suggest a slight moderation in global growth in the
first half of 2014. The stronger-than-expected acceleration in global activity in the latter part of
2013 was partly driven by increase in inventory accumulation that will be reversed.
1.1.3 Emerging market and developing economies (EMDEs), witnessed inflationary pressures driven
by a weaker exchange rate and domestic supply side factors. Many central banks in EMDEs were
faced with the trade-off arising from a combination of slowing economic growth and stubborn
inflationary pressures. In view of high inflation and exchange rate depreciation, many central
banks in the EMDEs including Turkey, Ukraine, Russia, Indonesia and Brazil hiked policy rates.
In the case of advanced economies, the US Fed began tapering in a calibrated manner in view of a
strengthening economic recovery. The European Central Bank (ECB) introduced negative deposit
rate to encourage bank lending for business activity. Global commodity prices continued to soften
amid improved supply and weak demand conditions in 2013-14. Global crude oil prices witnessed
some uptick during H1 of 2013-14 driven by supply outages but declined in H2 of 2013-14 on
account of easing supply concerns and tepid demand conditions2 .
1.1.4 In emerging market and developing economies, growth picked up slightly in the second half of
2013 due to increase in exports, lifted by stronger activity in advanced economies. But the
Graph 1 : Asia-Changes in Real GDP at Market Prices (in percent)
1. ASEAN includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam
2. India's GDP is at factor cost
1
World Economic Outlook April 2014
Reserve Bank of India Annual Report 2013-14

91
000
investment weakness continued, and external funding and domestic financial conditions
increasingly tightened. Supply-side and other structural constraints on investment and potential
output (for example, infrastructure bottlenecks) are issues in some economies. These offsetting
forces are expected to remain in effect through much of 2014. Overall, however, emerging market and
developing economies continue to contribute more than two-thirds of global growth, and their growth
is projected to increase from 4.7 percent in 2013 to 4.9 percent in 2014 and 5.3 percent in 2015.
1.1.5 While the financial environment for emerging markets has been challenging, financial conditions
across Asia have remained broadly conducive. Domestic credit growth and corporate bond
issuances have been strong indeed, corporate leverage for the region as a whole has risen, as
companies tried to take advantage of the still favorable global liquidity conditions. Activity across
Asia picked up in the second half of 2013. GDP growth improved across most of the region during
the past year, and recent high-frequency indicators, while somewhat mixed, point to a solid
expansion continuing into 20143 .
Table 1 - Overview of the World Economic Outlook Projections (Percent change unless noted otherwise)
Year over Year
Estimates
Projections
2013
2014
2015
2013
2014
2015
3.1
3.0
3.7
3.9
0.1
0.0
3.3
3.6
3.8
Advanced Economies
1.4
1.3
2.2
2.3
0.2
0.2
2.0
2.1
2.3
United States
2.8
1.9
2.8
3.0
0.2
0.4
2.5
2.8
3.0
0.7
0.4
1.0
1.4
0.1
0.1
0.5
1.2
1.5
0.9
0.5
1.6
1.4
0.2
0.1
1.6
1.3
1.4
France
2015
Estimates
2012
Germany
2014
Q4 over Q4
World Output 1
Euro Area
Projections
Difference from
October 2013 WEO
Published
0.0
0.2
0.9
1.5
0.0
0.0
0.6
1.2
1.6
Italy
2.5
1.8
0.6
1.1
0.1
0.1
0.8
1.0
1.2
Spain
1.6
1.2
0.6
0.8
0.4
0.3
0.2
0.7
0.9
Japan
1.4
1.7
1.7
1.0
0.4
0.2
3.1
0.9
0.6
United Kingdom
0.3
1.7
2.4
2.2
0.6
0.2
2.3
2.7
1.8
Canada
1.7
1.7
2.2
2.4
0.1
0.1
2.2
2.3
2.4
Other Advanced Economies
1.9
2.2
3.0
3.2
0.1
0.1
2.7
2.9
3.4
Emerging Market and

Developing Economies 1
4.9
4.7
5.1
5.4
0.0
0.1
4.8
5.4
5.6
Central and Eastern Europe
1.4
2.5
2.8
3.1
0.1
0.2
2.9
3.7
2.8
Commonwealth of
Independent States
3.4
2.1
2.6
3.1
0.8
0.7
2.2
1.4
3.1
Russia
3.4
1.5
2.0
2.5
1.0
1.0
1.9
1.5
3.2
Excluding Russia
3.3
3.5
4.0
4.3
0.1
0.1
...
...
Developing Asia
6.4
6.5
6.7
6.8
0.2
0.2
6.4
6.8
7.0
China
7.7
7.7
7.5
7.3
0.3
0.2
7.8
7.6
7.3
0.1
India 2
3.2
ASEAN-5 3
6.2
4.4
5.0
5.4
6.4
0.2
5.1
5.6
0.3
IMF Regional Outlook (Asia), April 2014

92
0.0
...
4.6
5.5
7.0
4.0
5.6
5.6
Chapter-1 Current Macro and Micro Economic Condition and Status of Indian Economy
Latin America and the
Caribbean
3.0
2.6
3.0
3.3
0.1
0.2
1.6
3.4
2.8
Brazil
1.0
2.3
2.3
2.8
0.2
0.4
1.9
2.6
3.0
Mexico
3.7
1.2
3.0
3.5
0.0
0.0
0.4
4.2
3.3
Middle East, North Africa,

Afghanistan, and Pakistan
4.1
2.4
3.3
4.8
0.3
0.7
...
...
...
Sub -Saharan Africa
4.8
5.1
6.1
5.8
0.1
0.1
...
...
...
South Africa
2.5
1.8
2.8
3.3
0.1
0.0
1.9
3.2
3.3
World Growth Based on

Market Exchange Rates
2.5
2.4
3.1
3.4
0.1
0.1
2.8
3.0
3.2
World Trade Volume (goods

and services)
2.7
2.7
4.5
5.2
0.5
0.3
...
...
...
Advanced Economies
1.0
1.4
3.4
4.1
0.7
0.5
...
...
...
Emerging Market and

Developing Economies
5.7
5.3
5.9
6.5
0.0
0.2
...
...
...
1.0
0.9
0.3
5.2
2.8
0.8
2.7
2.7
5.3
10.0
1.5
6.1
2.4
2.0
0.3
3.8
4.6
1.8
Advanced Economies
2.0
1.4
1.7
1.8
0.1
0.0
1.3
1.9
1.7
Emerging Market and

Developing Economies 1
6.0
6.1
5.6
5.3
0.0
0.1
5.7
5.1
4.8
On U.S. Dollar Deposits

(6 month)
0.7
0.4
0.4
0.6
0.2
0.3
...
...
...
On Euro Deposits (3 month)
0.6
0.2
0.3
0.5
0.2
0.4
...
...
...
On Japanese Yen Deposits

(6 month)
0.3
0.3
0.2
0.2
0.0
0.2
...
...
...
Memorandum
Imports (goods and

services)
Commodity Prices (U.S.

dollars)
Oil 4
Nonfuel (average based on
world commodity export
weights)
Consumer Prices
London Interbank Offered

Rate (percent)
Note: Real effective exchange rates are assumed to remain constant at the levels prevailing during
November 11-December 9, 2013. When economies are not listed alphabetically, they are ordered on the
basis of economic size. The aggregated quarterly data are seasonally adjusted.
1.
2.
3.
4.
The quarterly data and projections account for 90 percent of the world ppp weights and around 80
percent of the emerging market and developing economies.
For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP
at market prices. Corresponding growth forecasts for GDP at factor cost are 4.6, 5.4, and 6.4 percent
for 2013, 2014, and 2015, respectively.
Indonesia, Malaysia, Philippines, Thailand, and Vietnam.
Simple average of prices of U.K. Brent, Dubai Fateh, and West Texas Intermediate crude oil. The
average price of oil in U.S. dollars a barrel was $104.11 in 2013; the assumed price based on futures
markets is $103.84 in 2014 and $98.47 in 2015.
93
1.2
Indian Economy
1.2.1 The Indian economy weathered the global financial crisis rather well and quickly recovered from
the decline in growth rate in 2008-09 to a healthy growth that averaged around 9 per cent annually
in 2009-10 and 2010-11. However, Indian economy went through challenging times being part of
the global economy with its exports and imports amounting to 43 percent of GDP and two-way
external sector transactions amounting to 108 percent of GDP. The GDP went down to 4.5% in
2012-13 and 4.7% in 2013-14 and could be attributed to domestic and external factors such as
cyclical down turn with global contractionary headwinds, elevated current account deficit,
macroeconomic imbalance, persistent inflation, and the need for a sustainable policy. The
economy in 2013-14 has faced rather turbulent times emanating from exchange rate pressures
amid capital outflows, persistence of near double digit inflation, fiscal imbalances and a decline in
investment.
1.2.2 In 2013-14, the agriculture sector's rebound to an above trend growth rate on the back of a normal
monsoon, supported overall growth. The industrial sector contracted, while services sector growth
remained unchanged at the previous year's level. Structural impediments, high inflation and
domestic policy uncertainties continued to weigh down growth prospects. A series of financial
turbulence across the globe coupled with rising crude prices caused capital outflows and exerted
pressure on the exchange rates, with the Indian economy more or less typifying the 'fragile' EME
basket for the first half of FY 2013-14. It was observed that a low overall growth reflected
contracting fixed investment and slowing consumption, though there was an improvement in
export growth aided by rupee depreciation and contraction in imports due to subdued demand
conditions and policies to dissuade gold imports.
1.2.3 The inflation rate in India was recorded at 7.96 percent in July of 2014. Inflation Rate in India
averaged 9.49 percent from 2012 until 2014, reaching an all-time high of 11.16 percent in
November of 2013 and a record low of 7.31 percent in June of 2014. The moderation in consumer
price inflation resulted from a sharp correction in food prices. However, the disinflationary
momentum has not gathered strength as decline in food prices was temporary and second round
effects from high food inflation continue to exert pressures on the general price level. CPI
excluding food and fuel inflation showed considerable persistence at an elevated level during H1
of 2013 - 14, followed by a fall from 8.5 per cent in September 2013 to 7.8 per cent in March 2014
Graph 2 : Inflation rate in India as per Consumer Price Index (CPI) (in percent)
12
11.16
10
9.87
8.79
8.03
8.31
8.59 8.28
7.31
CPI (General)
4
Fe
b/1
4
M
arc
h/
14
Ap
ril
/1
4
M
ay
/14
Ju
ne
/1
4
/1
Ja
n
De
c/1
3
No
v/
13
94
and further to 7.4 per cent in July 2014. This decline in a component that has exhibited stickiness
was supported by a tight monetary policy stance. Going forward, while growth revival on a
sustainable basis will remain an objective, inflation risks will need to be factored in.
1.2.4 The Indian economy stands at crossroads which can be taken from a slow road to a faster one
through greater political stability and a supportive policy framework. The strong policy measures
taken by the Government and the RBI have some what stabilized the currency, rebuilt the reserves,
and narrowed the excessive current account deficit but the weaknesses in the form of persistent
inflation, fiscal imbalances, bottlenecks to investment, and inefficiencies that require structural
reform still persist. The Indian economy expanded at its fastest pace in two-and-a-half years in the
quarter ending June 2014 on the back of a turnaround in manufacturing. Quarterly GDP at factor
cost at constant (2004 - 05) prices for Q1 of 2014 - 15 is estimated at ` 14.38 lakh crore, as against
` 13.61 lakh crore in Q1 of 2013-14, showing a growth rate of 5.7 per cent over the corresponding
quarter of previous year4. The growth in the performance of exports (that registered a growth of
11.5 per cent at 2004 - 05 prices), along with the measures taken by the Government, the economy
can be expected to show further improvement in the remaining part of 2014 - 15.
Table 2:
Quarterly Estimate of GDPat Factor Cost in Q1 (April-June) of 2014-15 (at 2004-05 prices)
April - June, 2014 (Q1)
Industry
Gross Domestic Product

for Q1 (Amount in ` crore)
2012 -13
Agriculture, forestry &
fishing
2014 -15
2013 -14
2014 -15
1,77,947
1,85,084
1,92,115
4.0
3.8
26,519
25,490
26,016
- 3.9
2.1
2,08,756
2,06,340
2,13,470
- 1.2
3.5
26,018
26,999
29,763
3.8
10.2
Construction
1,01,803
1,02,875
1,07,779
1.1
4.8
Trade, hotels, transport &

communication
3,49,478
3,55,018
3,64,809
1.6
2.8
Financing, insurance, real

estate & business services
2,55,560
2,88,494
3,18,614
12.9
10.4
Community, social &

personal services
1,54,140
1,70,458
1,85,922
10.6
9.1
13,00,221 13,60,757
14,38,488
4.7
5.7
Mining & quarrying

Manufacturing
Electricity, gas & water
supply
GDP at factor cost
2013 -14
Growth to over
previous year Q1
(in percent)
MosPl- Estimates of Gross Domestic Product for the first quarter (April-June) 2014-15
95
1.2.5 The Reserve Bank of India and the Government will need to exercise caution during 2014-15 so
that the gains in macro-stability are preserved and the disinflationary momentum gathers traction.
Further, for the situation to improve microeconomic policies covering reforms in the areas of
industry, services, international trade, labour markets, public sector management, financial
markets and competition are needed to work towards improving activity levels and productivity,
thus shaping improved supply responses that can help enhance the growth potential. This
approach can help in hoping for a sustainable growth of at least 7 per cent in a non-inflationary
manner once global growth normalizes.
1.2.6 The financial sector especially the Public Sector Banks need to review their governance structure
and market discipline to contain the level of NPAs as percentage of Gross Advances. As per RBI's
Financial Stability Report (FSR), June 20145 , India's financial system remains stable, though the
banking sector is facing some major challenges, mainly relating to public sector banks (PSBs).
The year 2014-15 seems promising. Improved global growth momentum in 2014 and the recent
weakening of the rupee should spur exports. Export growth is also expected to pick up as the
advanced economies consolidate their growth momentum.
1.3
Indian Economy: Prospects for FY 2014-15

1.3.1 As per the Economic Survey 2014-156 , the Indian economy is poised to overcome the sub-5 per
cent growth of gross domestic product (GDP) witnessed over the last two years. The growth
slowdown in the last two years was broad based, affecting in particular the industry sector.
Inflation too declined during this period, but continued to be above the comfort zone, owing
primarily to the elevated level of food inflation. Yet, the developments on the macro stabilization
front, particularly the dramatic improvement in the external economic situation with the current
account deficit (CAD) declining to manageable levels after two years of worryingly high levels
was the redeeming feature of 2013-14. The fiscal deficit of the Centre as a proportion of GDP also
declined for the second year in a row as per the announced medium term policy stance. Reflecting
the above, with much expectations of a change for the better, financial markets have surged.
Moderation in inflation would help ease the monetary policy stance and revive the confidence of
investors, and with the global economy expected to recover moderately, particularly on account of
performance in some advanced economies, the economy can look forward to better growth
prospects in 2014-15 and beyond.
1.3.2 The Financial Year 2014-15 has begun on a promising note with IIP growth beginning to look up.
The Monetary policy is providing a more stable environment in terms of interest rates, liquidity
and credit conditions, with tangible efforts to improve resource flow to productive sectors. The
latter includes cuts in statutory liquidity ratio (SLR) and exemptions from regulatory pre-emptions
such as cash reserve ratio (CRR), SLR and priority sector lending (PSL) for issuing long-term
bonds to finance loans to infrastructure and affordable housing. Export growth has improved,
while capital inflows remain adequate. Further, there has been a healthy accretion to foreign
exchange reserves that helps insulate the economy against prospective shocks that may be
transmitted onshore. The spike in global oil price following the civil war in Iraq was transitory and
the oil prices seem to be stable. Overall, the exchange rate has been stable so far in 2014-15.
5
6
RBI's Financial Stability Report (FSR) June 2014

The Economic Survey 201415 by Ministry of Finance, Government of India
96
Box 1 : Excerpts from the Economic Survey 2014-15
Fiscal Deficit
l
l
l
l
l
India needs sharp fiscal correction

Need for subsidy reforms for fiscal consolidation
Recommends raising tax-to-GDP ratio for fiscal consolidation
Shortfall in revenues can be contained through better mobilization and reforms
External debt remains within manageable limits
Growth
l
l
l
GDP growth seen at 5.4-5.9 percent in 2014-15

Economic growth of 7-8 percent not seen before 2016-17
Downward risk to economic growth due to poor monsoon, external factors
Inflation
l
l
l
l
Government needs to move towards low and stable inflation through fiscal consolidation
Wholesale Price Index (WPI) inflation expected to moderate by end-2014
Consumer Price Index (CPI) inflation showing signs of moderation
Need to create a competitive national market for food
Balance of Payments
l
l
Improvement in balance of payments position during late 2013-14 was due to import restrictions and
economic slowdown
Need to adjust to advanced economies' event exit from accommodative monetary policy stance
Subsidies
l
l
Rationalization of subsidies such as fertilizer and food essential

Need to shift subsidy programme from price subsidies to income support
Taxation
l
l
Government needs to move towards simple tax regime, fewer tax exemptions, single rate of goods and
services tax (GST)
GST to play vital role in indirect tax reform
Forex Market
l
1.4
Intervention in forex market by Reserve Bank of India is behind accumulation of reserves generally
NHB-RESIDEX-The Residential Property Price Index

Keeping in view the prominence of housing and real estate as a major area for creation of both physical
and financial assets and its contribution in overall national wealth, a need was felt for setting up of a
mechanism, which could track the movement of prices in the residential housing segment. National
Housing Bank, at the behest of the Ministry of Finance, undertook a pilot study to examine the feasibility
of preparing such an index at the National level. The pilot study covered 5 cities viz. Bangalore, Bhopal,
Delhi, Kolkata and Mumbai, for which index was constructed till the period 2005 taking 2001 as the Base
97
Year. Based on the results of the pilot study and recommendations of the Technical Advisory Group
(TAG), NHB launched RESIDEX for tracking prices of residential properties in India, in July 2007.
The RESIDEX helps the general consumers and property buyers and borrowers in their decision-making
by enabling comparisons over time and across cities and localities based on the emerging trends. The
RESIDEX also provides insights into the property market for the lending agencies in their credit
evaluation and assessment of the value (present and potential) of the security against the loan. NHB
RESIDEX can be a useful indicator for estimating the value of property to be financed and also for
assessing the value of security cover on the outstanding loan. Builders and developers may also benefit
from the index by assessing the demand scenario in a locality, and mapping the housing needs in different
parts of the country. NHB RESIDEX is being well-received from all the corners of the industry e.g.
banks, HFCs, Builders & Developers and Government of India.
NHB RESIDEX tracks the movement in prices of residential properties on a quarterly basis. This is being
done since 2007. The latest NHB RESIDEX for the quarter April - June, 2014 covers 26 cities,with base
year as 2007.
The RESIDEX for the quarter April-June, 2014 constructed for 26 cities has taken into account the price
trends for residential properties in different locations and zones in each city and is based upon the
transaction data received from Central Registry of Securitization Asset Reconstruction and Security
Interest of India (CERSAI). The data based on actual transactions are put through a Model that depicts
the trend in the market. The RESIDEX is expected to bring greater uniformity and standardization as
well as greater transparency in the valuation of properties across the industry.
1.4.1 Price Movement for the quarter April-June, 2014 (26 Cities) : The movement in prices of residential
properties for the quarter April-June, 2014 has shown marginal increasing trend in eighteen (18) cities
ranging from 0.5% in Bhubaneswar to 3.9% in Pune, and fall in six (6) cities ranging from 0.5% in
Lucknow to 4.4% in Chandigarh in comparison to the previous quarter January-March, 2014. Indices for
2 cities namely Hyderabad and Raipur have remained stable.
1.4.2 Rising Trend: Residential housing prices in 18 cities have shown increase in prices in this quarter ended
June, 2014 (April-June, 2014) over the previous quarter ended March, 2014 (January-March, 2014).
Maximum increase was observed in Pune (3.9%) followed by Coimbatore (3.5%), Indore (3.3%),
Guwahati (3.2%), Patna (2.7%), Kolkata (2.4%), Ahmedabad (1.9%), Vijayawada (1.9%), Mumbai
(1.8%), Chennai (1.7%), Ludhiana (1.4%), Bhopal (1.3%), Kochi (1.2%), Jaipur (1.0%), Faridabad
(1.0%), Bengaluru (0.9%), Nagpur (0.6%) and Bhubaneswar (0.5%).
1.4.3 Declining Trend: 6 cities have shown decline in prices over the previous quarter with maximum fall
observed in Chandigarh (4.4%) followed by Meerut (3.6%), Delhi (3.0%), Surat (2.4%), Dehradun
(2.1%), and Lucknow (0.5%).
Indices for 2 cities namely Hyderabad and Raipur have remained stable.
98
Table 3: City-wise Housing Price Index for the Quarter April-June, 2014
Jan March
2014
Index
AprilJune
2014
Index
93
95
95
204
209
209
211
147
150
159
150
154
192
186
191
197
209
213
314
310
303
318
330
349
355
85
87
112
110
108
105
101
102
171
175
189
183
187
191
185
194
193
181
200
201
205
221
219
219
235
232
241
100
144
145
138
150
140
142
145
154
165
161
Kochi
100
72
73
80
87
89
86
86
85
85
86
Bhopal
100
204
207
206
216
230
227
220
223
226
229
Kolkata
100
191
196
191
209
197
189
199
196
206
211
Mumbai
100
190
197
198
217
222
221
222
222
229
233
Bengaluru
100
92
100
98
106
109
108
107
111
107
108
Delhi
100
168
172
178
195
202
199
190
196
199
193
Bhubaneshwar
100
161
164
168
172
197
195
193
202
195
196
Guwahati
100
157
159
158
166
153
147
149
160
154
159
Ludhiana
100
163
171
168
179
167
157
150
150
145
147
Vijayawada
100
184
186
181
185
184
174
167
161
160
163
Indore
100
208
203
196
194
195
184
180
184
181
187
Chandigarh
100
194
191
192
188
183
175
Coimbatore
100
184
178
178
173
170
176
Dehradun
100
183
184
184
186
191
187
Meerut
100
191
189
176
171
165
159
Nagpur
100
163
168
162
175
180
181
Raipur
100
156
155
157
159
166
166
2007
Index
Jan Mar
2012
Index
AprJun
2012
Index
JulSep
2012
Index
Hyderabad
100
86
85
84
90
88
84
88
Faridabad
100
217
217
216
205
207
202
Patna
100
129
140
138
151
152
Ahmedabad
100
164
174
180
191
Chennai
100
304
309
312
Jaipur
100
80
78
Lucknow
100
164
Pune
100
Surat
CITIES
OctDec
2012
Index
99
Jan Mar
2013
Index
AprJun
2013
Index
JulySep
2013
Index
OctDec
2013
Index
Chapter 2
Overview of the Indian Housing Sector
2.1
Importance of Housing
2.1.1 Housing, a basic human need, has always had and continues to have major socio-economic
implications and assumes a crucial role as it contributes significantly to the national economy and
nation building. The need for adequate shelter for all along with basic services is more urgent than
ever, particularly in developing countries like India.
2.1.2 Safe, secure and adequate housing is a fundamental need of man. Housing is a key input in
economic, social, and civic development. In importance, it is third after food and clothing. A host
of vocations and professions directly or indirectly derive their livelihoods from housing which
include construction workers, builders, developers, suppliers, civil engineers, valuers, furnishers,
interior decorators, and plumbers. Further, indirect impact of housing is in terms of improved
habitat, living, educational, social and cultural standards leading to human capital formation and
income capabilities. Housing is integrally related to a host of outcomes for the society more
broadly beyond those that are financial or material. Quality housing can facilitate psychological
and social outcomes such as an ontological security and a sense of control over one's life.
2.1.3 Housing tends to serve as a catalyst for a change in socio-cultural milieu and also aids in economic
development. More importantly, housing lays the foundation for a life of dignity. By investing in
homes, people, in particular, the low-income groups accumulate equity that can then be used as
collateral, making them more credit-worthy for accessing finance through normal channels and
also for generating income.
2.1.4 Census 2011 figures reveal that the housing stock has increased form 24.9 crore in 2001 to 33.1
crore in 2011, indicating a growth of 33 per cent. However, housing shortage is posing a challenge,
since there is a mismatch between the people for whom the houses are being built and those who
need them. As per the estimated housing shortage for 2012-17, urban area have about 95%
shortage in economically weaker sections and lower income group categories, whereas rural areas
have about 90% shortage in below poverty line category.
Table 4 : Estimated Housing Shortage in India: 2012-2017

Urban Housing*
Category
Economically Weaker
Sections (EWS)
Lower Income Group
(LIG)
Middle Income Group
(MIG)
Total
Shortage
(in million)
Rural Housing**
Percentage
to Total
Category
10.55
56.18
Below Poverty
Line (BPL)
7.41
39.44
0.82
4.38
18.78
100.00
Above Poverty
Line (APL)
Shortage
(in million)
Percentage
to Total
39.30
90.00
4.37
10.00
43.67
100.00
Source : * Urban Housing Shortage (2012-17) Report of the Ministry of Housing & Urban Poverty Alleviation to estimate the
Urban Housing Shortage for the 12th Five Year (2012-17)
** Working Group Report on Rural Housing for 12th Five Year Plan (2012-17)
100
Chapter-2 Overview of the Indian Housing Sector

2.1.5 The Indian economy is going through a transition phase of rapid urbanization. For ages the saying
was that "India lives in its villages". But now this has begun to change. Though the bulk of the
population might still remain in villages, the urban population content is rising. The urban
population of India is likely to grow from 285.3 million in 2001 to 533 million in 2025, as per the
projections based on past trends. Studies project that by 2030, the total urban population of India
will be 590 million i.e. 40 per cent of the Indian population would live in urban areas7 . The
projected growth is shown in the graph below.
(in million)
Graph 3: Projection of Growth of Urban Population in India

1600
1400
1200
1000
800
600
400
200
0
Urban Population
Total Population
1991
2001
2008
2030
2.1.6 The number of metropolitan cities with population of 1 million and above has increased from 35 in
8
2001 to 50 in 2011 and is expected to increase further to 87 by 2031 . The expanding size of Indian
cities will happen in many cases through a process of peripheral expansion, with smaller
municipalities and large villages surrounding the core city becoming part of the large metropolitan
area. The urbanization trend is going to have fundamental impact on the political, economical and
social situations of the country. Critical issues in urbanization include lack of basic infrastructure
such as roads, sanitation and drinking water systems, transport, affordable housing, slums and
squatters, internal migration and inclusive cities. Thus, there is a need to create safe, secure and
affordable housing for the urban masses for the growth and development of the country and to
create a more inclusive society. It is felt that, addressing housing shortage and improving
affordability is an integral part of the policy measures towards sustainable urban development. In
order to improve the quality of life, it is of critical significance that the housing stock is improved
through urban renewal, in situ slum improvement and development of new housing stock in
existing cities as well as new townships, etc., which meets the housing demand.
2.1.7 The importance of housing investment in the national economy and rapid growth of housing
investment have become distinct characteristics of the world economies in recent years. However,
at the same time, there is a concern that economic growth, if heavily dependent on housing
investment, may compromise the stability and the health of the national economy.
2.1.8 Granger causality analysis through statistical hypothesis test has confirmed the interaction
between housing investment and economic growth as well as that between non-housing
investment and economic growth. It has been found that housing investment has a stronger short
run effect on economic growth than non-housing investment. It has also been found that housing
investment has a long run effect on economic growth while economic growth has a long run effect
on both housing and non-housing investment. The findings suggest that housing investment is an
7
8
India Urbanization Econometric Model; McKinsey Global Institute analysis

Report on Indian Urban Infrastructure and Services
101
important factor contributing to short-term fluctuations of economic growth, with its growth
stimulating the economic growth and its slump leading to downside fluctuations.
2.1.9 Since 1970s, housing has come to be recognised as an important contributor to growth. This was
not because of the fact that house-building industry was a major employer with large multiplier
effects but also due to the fact that housing was increasingly seen to have social consequences
with diverse economic effects. The contribution and use of decent housing affects economic
growth and economic development through its impact on employment, savings, investment and
labour productivity in a positive manner.
Box 2: Study on Impact of Investments in the Housing Sector on GDP and Employment in
the Indian Economy

National Council of Applied Economic Research (NCAER) launched the Report in April 2014 on the
Study on Impact of Investments in the Housing Sector on GDP and Employment in the Indian Economy.
The Study was supported by DFID, UK and Ministry of Housing and Urban Poverty Alleviation,
Government of India. As per the Report, the construction sector is disaggregated into residential
construction, non-residential construction and other construction sector and the residential construction
sector is treated as housing sector.
The key findings in the Report, include a.
The residential construction (housing sector) accounts for

l
1.24% of the total output of the economy (total construction sector is 11.39%)
1.00% of GDP (total construction sector is 8.2%)
6.86% of the employment (total construction sector is 11.52%)
b.
Housing sector is fourth largest employment generating sector.
c.
99.41 per cent of the jobs in housing sector are informal jobs.
d.
Its labour to output ratio i.e. number of persons employed to produce a lakh units of output, is 2.34
and is the highest among all the sectors.
e.
For every lakh invested in the housing sector, 2.69 new jobs (2.65 informal and 0.4 formal) are
created in the economy. With induced effect, the number of jobs created would be 4.06 (3.95
informal and 0.11 formal).
f.
For every `1.00 investment in the housing sector, the household income increases by ` 0.41. With
induced effect, this is estimated to be `0.76.
g.
Every additional rupee invested in the housing sector can add `1.54 to the GDP and with
household expenditure considered, this is going to add `2.84.
h.
For every rupee invested in creation of housing, `0.12 gets collected as indirect taxes.
2.2
Issues Concerning Housing in India

2.2.1 Housing shortage has always been a major problem over the years in our country since
independence. Such shortage estimated as excess households over houses including houseless
households, congestion (number of married couples requiring separate house), and replacement/
up-gradation of kutcha/ unserviceable kutcha houses and obsolescence/ replacement of old
houses, etc., which has grown over the decades.
102

2.2.2 The extent of urbanization in India is much lower than other developing countries; with only over
31% of the population residing in urban areas. As per the Census data for 2011, the urban
population in India was over 377 million or 31.1% of the total population residing in 475 urban
agglomerations. The inability of our society to keep pace with the increase in population has
resulted in an under-supply of housing units, which in 2012 was estimated by the Ministry of
Housing and Urban Poverty Alleviation (MoHUPA) at 18.78 million units of which nearly 95%
relates to the economically weaker sections (EWS) and low income group (LIG) of the urban
population. By 2021, the urban population is expected to increase to nearly 500 million, about
35% of the total population of India. The 2011 Census has enumerated that 13.9 million
households with a total population of nearly 65.5 million people reside in slums in Indian cities.
Rural migration is considered to be one of the most important contributors to the growth in the
slum population. The number of people and the percentage of population employed in agriculture
are on a steep downward curve, reducing from 259 million (almost 57%) in 2004-05 to 243 million
(about 50%) in 2012-13. Despite the continued large scale migration of the rural poor to urban
areas, the Twelfth Five Year Plan (2012-17), has estimated the total housing shortage in rural areas
at 43.67 million units. The slum population in India was projected to be 94.98 million in 2012 and
is expected to touch 104.67 million by 2017. This increase in population, if not matched with the
required increase in housing units could contribute to the development of further slums in urban
areas, creating a social problem and becoming detrimental to the overall health of the Indian
economy. Hence, the total housing demand in the country by 2017 could be as high as 88.78 mn
units. Creating flexible affordable housing with certain percentage reserved for rental schemes
might provide a faster solution for a slum-free India. In cities such as Mumbai, affordable housing
can be mainly developed through the redevelopment of existing slums due to the severe paucity of
developable land.
2.2.3 Affordable, suitable, adequate and equitable housing is a major priority for governments all over
the world. However, even though housing is a basic necessity of life, more than half of the
population lives in sub-standard houses where they have no access to adequate sanitary facilities,
water and warmth to meet their daily physical needs. Owning suitable shelter is usually very
expensive for common households. Affordability of building is affected by land accessibility, land
cost, high cost of mortgage, institutional coordination with regard to infrastructural development,
government approval procedures and availability of finance. Hence, strategies need to be initiated
and adopted at the governmental level to deal with the issues relating to land cost, institutional
development and legislation, and make the housing products available to the masses at affordable
cost.
2.3
The Indian Housing Finance Market

2.3.1 In the Indian context, the housing finance system has been rapidly evolving. The sector is largely
driven by the aspirations of people in all income segments who desire to own a house early in their
lives. The capacity of the lending institutions has grown over the years as the mortgage segment
has proved to be promising and profitable and increasingly bankable. The market is big and
growing on account of factors such as rapid urbanization, population migrating to urban centers,
and demographic composition. The growth and evolution of the sector are marked by challenges
and opportunities for the various stakeholders. While the financial sector (demand side) is fairly
unified under the governance of a central regulator, the construction activities and land resources
(supply side, or the real economy) and their governance are decentralized and somewhat
fragmented. This has thrown up regulatory challenges often resulting in multiple regulations. This
tends to affect the efficiency of the market, while inducing some unintended distortions that limit
103
the market potential. However, it is widely recognized that the Indian mortgage finance market has
withstood the stress and pressures resulting from the ongoing global crisis. This is evidenced by
the sustained robust growth of the sector despite recessionary trends in several quarters of the
domestic economy. The quality of assets in the housing sector has been consistently good, as
reflected in the low level of non-performing loans, though the coverage has progressively
expanded across the population and geographical regions. While the market has become more
engaging for the lenders, the need for a good balance between regulation and development cannot
be overemphasized in the larger context of the economic imperatives and the national priorities of
the government.
2.3.2 The 1990s have been very eventful for India, more particularly in terms of the financial sector
reforms that paved the way for better play of 'market forces' as the economy made the transition
from a controlled and regulated regime to a liberalized and open regime. The Government's
progressive 'hands off' approach has led to a greater role for market forces in the economy. The
changes have been path-breaking and have involved institutions, policies, systems and practices.
This has not been an easy transition as the developmental objectives of the Government needed to
be addressed through the market mechanism. This in itself has been a challenge which has
involved prioritization in terms of social needs and market capabilities.
2.3.3 The evolution of the housing finance system in India amid this broader transition in the economy
had to be carefully and diligently guided through these difficult years. 'Housing' has historically
been a social priority next only to food and clothing. The social connotation of the housing
sector also had to undergo a transformation to reflect the spirit and potential of a liberalized and
market oriented system. There is need for long term sustainable solutions through policy
interventions instead of short term solutions driven by short term objectives as the latter may
lead to malfunctioning of the housing finance market in the future. The cost has to be met
eventually by the market. With appropriate care and responsive regulations, the tension
between 'regulation' and 'development' can be considerably eased to enable the market to deliver
optimum results.
2.3.4 The Indian housing finance market is today among the more robust and vibrant segments of the
Indian economy. The Indian housing finance market has developed only in the past three decades
or so, as prior to the late 1980s there was virtually no housing finance market to speak of. In the past
three decades, particularly the period post-1987 (i.e. after establishment of the National Housing
Bank), the housing finance market in India has grown phenomenally, enjoying double digit yearon-year growth and achieving vibrancy in terms of a larger number of players and products to
serve different segments of the market. During these years, the regulatory philosophies of the
National Housing Bank and the Reserve Bank of India (the central bank of India and regulator of
all banks operating in the country) have been constantly changing and evolving as per the needs of
the sector and market environment, domestic and global.
2.3.5 Housing finance problems began to surface as early as the 1970s. The Indian Government has
taken various initiatives over time to address these problems. Prior to the establishment of NHB in
1988, the housing finance market in India was characterized by centralized directed credit. The
Central/State Governments were operating a number of subsidized housing schemes and loan
schemes which were meant for industrial workers, economically weaker section of the society and
slum dwellers. However, the loan schemes were targeted for the people in the low-income group as
well as rental housing schemes for State Government employees. The following institutions are
providers of market-based housing finance solution, in one form or another:
104

Commercial Banks are the largest mobiliser of savings with wider network coverage. Their role had
traditionally been earlier limited to providing the working capital needs of business, industry
and commerce and hence, they were not active participants in the housing finance market. Another
reason was that they were funded by short-term resources, which could not be profitably employed
in long term lending. However, Banks today are the major lenders to housing sector, accounting
for nearly 67% of the market. As a result of concreted efforts by NHB, RBI and Central Government
towards development of stable housing finance, Banks now have much larger housing loan
portfolios and are quite bullish on this product segment. Also the Banks by way of their risk monitoring
and responsible lending, have been able to manage overall NPA levels, making them strong reason to
continue to lend to this sector.
Housing Finance Companies are companies with principal objective of lending for housing finance.
However, the noticeable aspect revealed is that there are only about 20 companies accounting for greater
than 90% of total housing loans provided.
The NHB operates as the principal agency for promoting, regulating and providing financial and other
support to HFCs at local and regional levels, while banks and NBFCs are managed and regulated by the
RBI. As on June 30, 2014, 59 companies have been granted certificates of registration by NHB to act as
HFCs. Over the years, the market share of housing finance companies (HFCs) has significantly come
down vis--vis banks on account of considerable depth and reach of the banking sector in all parts of the
country, including rural areas and their lending at more competitive costs. They have also exploited the
potential of cross selling across their already existing large customer base and vast network of branches.
Though the bank's portfolio over the recent years have shown robust growth in disbursements in the retail
housing loan market, HFCs have also grown steadily over the years in a largely stable and regulated
market environment, supported with their strong origination skills and diverse channels of sourcing
business. Over the last few years, NHB has launched various refinance schemes to promote institutional
financing of the rural and urban low-income housing segments. Examples of such schemes include Rural
Housing Fund (RHF), Urban Housing Fund (UHF), and Special Refinance Scheme for Urban Low
Income Housing.
With sharper focus on collections and recoveries, the quality of asset of HFCs was maintained well in the
FY 2013-14. Although HFCs have been able to maintain their asset quality so far in a difficult operating
environment, given the increasing focus of some players on relatively risky products/customer segments
and a large-ticket developer loan book, it is expected that there will be some increase in the HFCs' nonperforming assets (NPAs) from the current levels. However, overall, the gross NPA percentage is
expected to remain around range over the medium term.
Cooperative Banks deploy funds from a common pool of resources to provide for various needs of its
members. In Indian scenario, a lot of reluctance has been noticed by these cooperative banks to provide
loans for housing finance. The major reason for this is the high risk and illiquidity in giving housing loans
from common corpus.
Regional Rural Banks were not active in housing finance because of the involvement of large amount
and assessment of creditworthiness coupled with fear of illiquidity and losses. However, now they have
been active and their share in housing finance is increasing.
Agricultural and Rural Development Bank's major function is not the provision of housing finance
and they maintain low profile.
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Box 3: Report on "Scaling Up Housing Microfinance" by NHB in collaboration with IFMR

Capital and DFID, UK.
The Bank collaborated with IFMR Capital and DFID UK to carry a study on "Scaling up of Housing
Microfinance in India" with the objective of evaluating NHB's housing microfinance programme and
studying the savings pattern of select informal sector households. Further, the study endeavored to develop
a savings-linked housing finance product and understand the potential of the SHG-Bank Linkage model for
a housing finance product. The study examined microfinance institutions and non-government
organizations working in the area of housing microfinance in ten states.
Major Recommendations of the Study, include a)
Wholesale Financing- Funding Model
In order to enable continuous and dependable flow of finance for wholesale financing of housing
microfinance, the funding model proposed in this study is based on the principles of incentive
alignment and active risk management.
It is imperative that for the purpose of ensuring an efficient system design for housing microfinance, a
structure is built where there is first loss provision from the originator MFI.
In order to facilitate confidence amongst banks to lend through the MFIs, a structure where NHB
provides a second loss protection in the form of a guarantee is much required. The idea is to partner
with a forward looking bank and demonstrate a model of funding which can then be replicated in
future by other guarantee agencies partly replacing the NHB in its role as the second loss provider in
the structure.
b)
Role of the National Housing Bank
Significant support from NHB would be required to train the NGO-MFI staff on helping their clients
in formalizing their land titles during the course of the loan disbursal process.
NHB should proactively work towards developing sound financing structures to support the program.
Providing second loss guarantees that add an additional line of protection for participating banks,
would incentivize banks to participate in such a program, while at the same time ensuring that the
banks retain risk over and above the first loss provided by the NGO-MFI and second loss from the
NHB.
NHB should also consider continuing its focus on capacity building specifically targeting NGO-MFIs
for this purpose. Assistance in the form of imparting skills required for originating housing loans as a
departure from the conventional group liability product would be key in ensuring that the NGO-MFIs
originate high quality loans.
The NHB has to play a role in training staff on institutionalizing the process of formalizing land titles.
This would not only have a widespread impact on the land rights of the lower income households but
would also unlock a huge market which currently is served by the informal sources of finance. In
addition, the housing finance companies will have a larger market of properties with good title to
finance.
The NHB has a large mandate and may not be able to keep a strong operational control on a
widespread program. It may consider the role of piloting and demonstrating the model suggested
above so that it can be replicated by others.
There is a clear need for institutions which can keep a direct tab on the NGO-MFI partners and push
improvement. In scaling up the housing microfinance program, NHB can consider partnering with
market participants, such that NHB plays the role of a facilitator and enabler.
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Chapter 3
Policy Environment for Housing and
Housing Finance
3.1
Concept ofAffordable Housing

3.1.1 Affordable housing refers to housing units that are affordable by that section of society whose
income is below the median household income. Though different countries have different
definitions for affordable housing, but it is largely the same, i.e. affordable housing should address
the housing needs of the lower or middle income households. Affordable housing becomes a key
issue especially in developing nations where a majority of the population is unable to buy houses at
the market price. Disposable income of the people remains the primary factor in determining the
affordability. As a result, it becomes the increased responsibility of the Government to cater to the
rising demand for affordable housing. The Government of India has taken various measures to
meet the increased demand for affordable housing including stressing on Public-Private
Partnerships (PPP) for development of these units.
3.1.2 The need to facilitate supply of affordable housing to the unserved population and to encourage
broad based home ownership through a right mix of policy initiatives cannot be overemphasized.
In this context, the role of the Governments (both Central and State), financial institutions in terms
of deliberate policies and interventions, is to create an enabling environment for the private sector,
so as to facilitate realization of affordable and decent housing for all. The Government of India's
focus through various housing policies schemes and funds is to increase housing stock and provide
low cost housing finance to the under served and unserved. Housing has been an important subject
in the Five Year Plans and specific Schemes such as Indira Awas Yojna, Golden Jubilee Rural
Housing Finance Scheme, etc. and funds such as Rural Housing Fund, Urban Housing Fund, etc.
have been formulated/created in order to promote affordable housing.
3.2
The Role of DifferentAgencies towardsAffordable Housing

3.2.1 Role of Central Government: The National Urban Housing & Habitat Policy 2007 (NUHHP2007) seeks to promote various types of Public-Private Partnerships for realizing the goal of
"Affordable Housing for All" with special emphasis on the urban poor. Given the magnitude of the
housing shortage and budgetary constraints of both the Central and State Governments, the
NUHHP, 2007 focuses the spotlight on multiple stake-holders. Specific roles have been envisaged
under the policy for various stakeholders, which are as under:
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To play a role of enabler and facilitator and ensure that private sector is enthused to take up
affordable housing projects.
To advise and guide respective State Governments to adopt and implement the National Urban
Housing & Habitat Policy in a time bound manner.
To promote balanced regional development in the country by suitably decentralizing functions

relating to development of the Housing Sector and promotion of an ecologically sound habitat.
To develop suitable financial instruments for promotion of housing for the EWS and LIG groups
serviced by basic amenities.
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To promote action plans for creation of adequate infrastructure facilities relating to water,
drainage, sanitation, sewerage, power supply and transport connectivity.
To develop economically viable housing promotion models and standards for provision of
physical, social and economic services.
To develop suitable fiscal concessions in collaboration with the Ministry of Finance for promotion
of housing and urban infrastructure with special focus on EWS/LIG beneficiaries.
3.2.2 Roles of State Governments:

To prepare the State Urban Housing and Habitat Policy.
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To ensure suitable flow of financial resources to potential EWS/LIG beneficiaries as well as

undertake viability gap funding of large housing and habitat development projects.
To prepare medium term and long term strategies for tackling problems relating to provision of
adequate water supply, drainage, sewerage, sanitation, solid waste management, power supply and
transport connectivity.
To promote and incentivize decentralized production and availability of local building materials.
To prepare and update Master Plans along with Zonal Plans, Metropolitan Plans, District Plans and
the State level Regional Plan by respective agencies with provision of adequate land for urban
poor.
To promote well designed Public-Private Partnerships for undertaking housing and infrastructure
projects.
To act as a facilitator and enabler in collaboration with ULBs/Parastatals/ Private Sector

Cooperative Sector / Non-Government Organizations (NGOs) with regard to Integrated Slum
Development Projects as well as Integrated Township Development Projects.
To encourage Cooperative Group Housing Societies, Employees Organizations, labour housing

promotion organization, NGOs and Community Based Organizations (CBOs) to have
Partnerships with Urban Local Bodies / Parastatals in relation to housing related micro-finance
and housing development.
3.2.3 RolesofFinancial Institutions:

To reassess their strategies with a view to make them more inclusive in terms of EWS and LIG
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segments
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To promote innovative financial instruments
To enhance/ strengthen the income spread of housing loans portfolio to increasingly cover BPL
and EWS beneficiaries.
To adopt a more flexible and innovative approach in relation to credit appraisal norms.
To Develop financial products which encourage EWS and LIG beneficiaries to take insurance
cover.
To plough part of their resources towards financing slum improvement and up-gradation
programmes.
To devise innovative housing finance schemes for targeting the EWS and LIG segments, with
suitable subsidy support from the Government.
To promote MFIs and SHGs for mobilizing savings and play a significant role in housing finance
sector.
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Chapter-3 Policy Environment for Housing and Housing Finance
3.3
Recent Housing Schemes Implemented by the Government of India

3.3.1 The initiatives by the Government of India like allowing FDI up to 100 per cent in development
projects for townships and settlements, approval of the Real Estate (Regulation and Development)
Bill, 2013, setting up the Urban Housing Fund and impetus to Subsidy Schemes like the Rajiv
Rinn Yojana have further strengthened the sector.
3.3.2 The recent budget announcements related to housing sector have been encouraging. An allocation
of ` 8,000 crore to support rural housing and ` 4,000 crore for affordable housing to the urban
poor/EWS/LIG segment through NHB, will increase the flow of cheaper credit for housing.
Further, the Government has mandated to provide 'Housing for All by 2022'. With this objective
the Hon'ble Finance Minister in his Budget Speech announced the setting up of a Mission on Low
Cost Affordable Housing, which will be anchored by the National Housing Bank. The scheme will
incentivize the development of low cost affordable housing.
3.3.3 Similar Policy-based efforts like providing tax sops for the Real Estate Investment Trusts (REITs),
as announced in the Union Budget of 2014-15, could result in extracting new growth opportunities
through Rental, Affordable and Senior Citizen Housing projects that can increase the depth of the
industry. REITS have been successfully used as instruments for pooling of investment in several
countries and such instruments will definitely attract long term finance from foreign and domestic
sources including the NRIs. REITs would reduce the pressure on the banking system while also
making available fresh equity.
Box 4: Announcements related to Housing Sector in the Union Budget 2014-15
Allocation for National Housing Bank increased from ` 6,000 to ` 8,000 crore to support Rural
housing.
` 4,000 crore allocated to NHB from the priority sector lending shortfall with a view to increase the
flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment
Extended additional tax incentive on home loans to encourage people, especially the young, to own
houses.
Mission on Low Cost Affordable Housing will be anchored by the National Housing Bank
Slum development to be included in the list of Corporate Social Responsibility (CSR) activities to
encourage the private sector to contribute more.
Master planning of 3 new smart cities in the Chennai-Bengaluru Industrial Corridor region, viz.,
Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka to be
completed. Development of industrial corridors with emphasis on Smart Cities linked to transport
connectivity to spur growth in manufacturing and urbanization will be accelerated.
` 7,060 crore is provided in the current fiscal for the project of developing "one hundred Smart
Cities'
Incentives for Real Estate Investment Trusts (REITS), complete pass through for the purpose of
taxation and a modified REITS type structure for infrastructure projects as the Infrastructure
Investment Trusts (InvITs), may attract long term finance from foreign and domestic sources
including the NRIs.
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3.3.4 The major policies/schemes implemented by the Central Government in housing are as
outlined below:
3.3.4.1 The National Urban Housing & Habitat Policy, 2007 strives to promote equitable
distribution of land, shelter, and services by promoting "various types of public-private
partnerships for realizing the goal of affordable housing for all"
3.3.4.2 The Jawaharlal Nehru National Urban Renewal Mission (JNNURM), a Central
Government Program launched in collaboration with various State Governments and
Urban Local Bodies, supports 63 cities across the country. The focus of the programme is
on improving efficiency in urban infrastructure services delivery mechanism, community
participation and accountability of Urban Local Bodies. The Bharat Nirman programme,
launched in 2005, is continuing its focus on the provision of basic amenities like drinking
water, roads, irrigation facilities, electricity and the construction of houses in rural areas
through its six flagship programmes.
3.3.4.3 The Indira Awas Yojana (IAY) is focused on the provision of cash subsidy to rural BPL
families for construction of dwelling units using their own design and technology. The
funding under the Scheme is provided by the Centre and State in the ratio of 75:25
respectively.
3.3.4.4 To improve the affordability of housing loans to EWS/LIG segments in urban areas,
Ministry of Housing and Urban Poverty Alleviation (MoHUPA), Government of India
implemented Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) on
December 26, 2008 to provide home loan to EWS/LIG persons for
acquisition/construction of house. The Scheme provided a subsidy of 5% for a loan
amount up to ` 1 lakh for the entire tenure of loan on an upfront basis. The Central Nodal
Agencies (CNA) for the scheme were National Housing Bank (NHB) and Housing &
Urban Development Corporation Ltd. (HUDCO). The Scheme was closed w.e.f.
September 30, 2013.
3.3.4.5 MoHUPA, Government of India revised Interest Subsidy Scheme and renamed it as Rajiv
Rinn Yojana (RRY), as an additional instrument for addressing the housing needs of
EWS/LIG segments in urban areas with increase in limit of eligible housing loans from
` 1 lakh to ` 5 lakh. Rajiv Rinn Yojana is effective from October 1, 2013. Under RRY, the
amount of loan has been revised up to ` 5 lakh for EWS and ` 8 lakh for LIG beneficiaries.
However, the interest subsidy of 5% is made available on a maximum loan of `5 lakh for
both categories of beneficiaries. The eligible lending institutions under the scheme are
SCBs, HFCs and RRBs. NHB and HUDCO are the 2 nodal agencies under the Scheme.
Under RRY, The economic parameter of EWS is defined as households having an average
annual income up to ` 1,00,000/- and the economic parameter of LIG is defined as
households having an average annual income between ` 1,00,001/- up to ` 2,00,000/-.
This will be subject to revision by the Steering Committee of the Scheme from time to
time.
3.3.4.6 1% Interest Subvention Scheme: In order to stimulate demand for credit for housing in the
lower & middle income segment of population in the country, Government of India,
Ministry of Finance w.e.f. October 01, 2009, implemented interest subvention of 1% for
one year (first 12 months) on all individual housing loans upto ` 10 lakh, provided the cost
of the unit does not exceed ` 20 lakh, which continued till FY 2010-11. The Scheme was
further extended for FY 2011-12 and FY 2012-13 with increase in limit of housing loans
upto `15 lakh and cost of house upto ` 25 lakh from ` 10 lakh and ` 20 lakh, respectively.
The Scheme ceased to be in operation from April 01, 2013. The loans provided by the
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lending institutions upto March 31, 2013 were/are eligible for the interest subsidy under
the Scheme. All regions of the States and Union Territories in the country, including rural
and urban areas were covered under the Scheme. The Scheme was implemented by SCBs,
HFCs and RRBs. During the initial period of the Scheme, RBI and NHB were designated
as Nodal agencies for SCBs and HFCs, respectively. NHB was designated as the sole
nodal agency for SCBs and HFCs from FY 2011-12.
3.3.4.7 The Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) has been
set up and registered by Government of India on May 01, 2012 under the aegis of the
Government of India, Ministry of Housing and Urban Poverty Alleviation (MoHUPA).
The Trust is managed by NHB and MoHUPA, with Government of India as the "Settler" of
the Trust.
The Trust has an initial Corpus Fund of ` 1 lakh contributed by the Settler. Further
contribution will be made to the initial corpus by the Settler and the State Governments,
who draw on it in accordance with slum population, i.e. ` 1,000 crore in the aggregate by
the Settler and ` 200 crore by the State Governments.
As on June 30, 2014, MoHUPA, as Settler, has contributed ` 150 crore towards the corpus
fund of the Trust. Credit Risk Guarantee Fund Scheme (CRGFS) for low income housing
has also been notified by MoHUPA, vide Gazette Notification dated July 7-13, 2012.
CRGFS provides guarantee for housing loan upto ` 5 lakh sanctioned and disbursed by the
lending institutions without any collateral security and/or third party guarantee to the new
borrowers in the EWS/LIG categories in urban areas for home improvement/acquisition
and purchase of new or second hand dwelling unit/construction/extension of an
affordable dwelling unit with carpet area not exceeding 430 sq.ft. (40 sq.m.). The
guarantee cover available under the Scheme is to the extent of 90% of the sanctioned
housing loan amount upto ` 2 lakh and 85% for loan amounts above ` 2 lakh and upto ` 5
lakh. The lending institutions eligible to avail benefit of the Guarantee cover under the
Scheme of the Fund Trust are SCBs, RRBs, UCBs, NBFC-MFIs, Apex Cooperative
Housing Finance Societies registered under the State Co-operative SocietiesAct and HFIs
registered with NHB. As on June 30, 2014, 47 institutions have signed Memorandum of
Understanding (MoU) with the Trust under the Scheme.
The major objective of the Trust is to guarantee housing loan up to ` 5 lakh sanctioned and
disbursed by the lending institutions without any collateral security and/or third party
guarantee to the new borrowers in the EWS/LIG categories in urban areas. Therefore, it
will act as a risk mitigant for lending institutions (Members of the Scheme) and will help
increasing the scope of lending by Member Lending Institutions (MLIs) for low income
housing for EWS/LIG segments.
The housing loans provided by MLIs to these segments which are covered under the
CRGFS, entails them of certain benefits under prudential norms e.g. Zero Risk Weight, no
NPA provisions etc. This means lesser requirement of CRAR for this loan portfolio.
Therefore, it is expected that the benefits to MLIs will be passed on to the intended
beneficiaries under the Scheme helping EWS/LIG borrowers in acquiring/construction of
affordable housing units.
Further, the Scheme is applicable for the eligible housing loans extended by the lending
institution in urban areas. The coverage under urban areas may extend to statutory towns,
urban agglomerations and planning areas. The descriptions of statutory towns, urban
agglomerations and planning areas are given below:
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Statutory Towns: Place with a municipality, corporation, cantonment board or notified town area
committee, etc., of urban unit is known as Statutory Town. These towns are notified under law by
the concerned State/UT Government and have local bodies like Municipal Corporations,
Municipalities, Municipal Committees, etc., irrespective of their demographic characteristics as
reckoned on December 31, 2009, Examples: Vadodara, Shimla etc.
Planning Area means a planning area or a development area or a local planning area or a regional
development plan area, by whatever name called, or any other area specified as such by the
appropriate Government or any competent authority and includes any area designated by the
appropriate Government or the competent authority to be a planning area for future planned
development, under the law relating to Town and Country Planning for the time being in force.
Urban Agglomeration is a continuous urban spread constituting a town and its adjoining
outgrowths (OGs), or two or more physically contiguous towns together with or without
outgrowths of such towns. An Urban Agglomeration must consist of at least a statutory town and
its total population (i.e. all the constituents put together) should not be less than 20,000 as per the
2001 Census. In varying local conditions, there were similar other combinations which have been
treated as urban agglomerations satisfying the basic condition of contiguity. Examples: Greater
Mumbai UA, Delhi UA, etc.
3.3.4.8 Capital Subsidy Scheme for Installation of Solar Water Heating and Solar Lighting Systems in
Homes
With a view to promote the use of solar energy in the domestic context, the Ministry of New and
Renewable Energy (MNRE), Government of India, is implementing a capital subsidy scheme,
under its Jawaharlal Nehru National Solar Mission (JNNSM). The Scheme aims at popularizing
the use of solar water heating and solar lighting systems in homes by offering suitable incentives in
the form of capital subsidies for purchase and installation of the solar systems. NHB has been
designated as a nodal agency for administering and monitoring the capital subsidy scheme.
The Scheme has commenced from April 01, 2014 and loans disbursed on or after April 01, 2014
are eligible to be covered under the Scheme. The Scheme will be valid till December 31, 2015, or
such extended period as may be allowed by the Government of India.
The subsidy component is limited to 30% of the benchmark cost in case of solar water heating
systems [subject to max. of 500 lpd per house]. In case of solar home lighting system, it is limited
to 40% of the benchmark cost for units up to 300 watts capacity and 30% of the benchmark costs
for units above 300 watts to 1000 watts. The benchmark cost is prescribed by MNRE from time to
time.
The institutions eligible to participate in the Scheme include HFCs, SCBs, RRBs, Scheduled
Urban Cooperative Banks (UCBs),ACHFs andARDBs.
3.3.4.9 Central Registry of Securitization Asset Reconstruction and Security Interest of India
(CERSAI): To prevent frauds in loan cases involving multiple lending from different banks/HFCs
on the same immovable property, the Government has facilitated setting up of the CERSAI under
the SARFAESI Act, 2002. This Registry has become operational with effect from March 31, 2011.
The objective of setting up the Central Registry is to provide a database of security interest over
property rights to secure loans and advances granted by banks and financial institutions.
Availability of encumbrance status, inter alia, help in preventing frauds involving cases where
loans are taken from different lenders against the same property by creating multiple mortgages by
deposit of title deeds as well as fraudulent sale of property without disclosing the security interest
over such property.
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3.4
Select State Level Initiatives in Housing

The State Governments have also taken various initiatives towards providing housing to all through
different schemes and policies. These schemes sometimes complement the existing Central
Government Schemes. State Level initiatives of select States are outlined below:
3.4.1 West Bengal
The Department of Housing, Government of West Bengal undertakes various activities mainly
relating to the framing and implementation of various Social Housing Schemes through the
Directorate of Housing and West Bengal Housing Board9 . Various Schemes active in the State are:
l
'Gitanjali' and 'Amar Thikana': Housing Department of Bengal shall take up

construction of 20,000 (twenty thousand) flats for minority people and 10,000 (ten
thousand) houses for the fishermen. With a view to provide proper shelters free of cost to
the poor, the Housing Department of the Government has laid proper focus on construction
of houses for the Economically Weaker Section of people. This Scheme is being
implemented in the rural areas and non-Municipal urban areas in coordination with seven
other Government Departments under the name of 'Gitanjali' and 'Amar Thikana'.
The objective of the Scheme is to provide proper shelters to the economically weaker
section of society as well as to create additional employment opportunities for construction
workers, etc. The cost of such dwelling units for new construction on beneficiary's land in
rural areas varies across the span and terrain of the State
Panchayat and Rural Development Department is implementing the Scheme 'Amar
Thikana' at a unit cost of `45,000/- for the plain areas and `48,500/- in hills, difficult areas
and coastal areas. Families with monthly income of `6,000/- or less are benefitted under the
Scheme.
Adhikar: The Housing Department decided to implement Low Income Group (LIG)
Housing Schemes directly to solve the accommodation problem of the LIG people
especially the minority people residing in urban areas. To mitigate the accommodation
problem of the Middle Income Group people residing in urban areas, the Housing
Department has taken up a programme for construction of some MIG Housing Schemes on
rental basis. The Housing Department at present maintains about 34,000 flats of various
categories throughout West Bengal. In 2012-13, the State Government has also piloted one
special scheme "Adhikar", conceptualized by the State Government.
During 2013-14, more than 250,000 lakh houses were completed under the IAY and
Adhikar Scheme. Since May, 2011, 83,000 houses have been constructed under the
Gitanjali Scheme for Economically Weaker Sections (EWS) with total cost of around
`1,000 crore. By January 2014, 507,807 household latrines, 6,190 school toilets, 4,168
Anganwadi toilets and 116 sanitary complexes for women were constructed.
Apart from this the Department has decided to construct Night Shelter-cum-Bus Sheltercum-Pay & Use toilet throughout the state at every 50 kilometers of the National Highways,
State Highways and other important roads for the passengers, especially the women
undertaking their journey by road.
Housing Department, Government of West Bengal (http://www.wbhousing.gov.in/)

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'Nijo Griha Nijo Bhumi Prakalpa': A new State Plan Scheme, 'Nijo Griha Nijo Bhumi
Prakalpa' was introduced to provide housing to all landless & homeless families. Total
number of homestead pattas distributed under NGNB (a new scheme launched in October,
2011) up to March, 2013 was 60,193 covering 2,421 acres of land. During the period 201112, agricultural pattas were distributed among 7,912 beneficiaries while during the period
2012-13, the total number of agricultural pattas distributed was 35,461. Pattas have been
distributed to the eligible beneficiaries.
Housing Schemes under Backward Region Grant Fund (BRGF): With a view to make
the Housing programme for Economically Weaker Section of people (EWS) more effective
and to address the problem of regional imbalances in respect of housing for poor people,
special stress has been given to the Backward regions (Districts) of the State. Construction
work of houses has been proposed under Special Grant from BRGF for construction of
34,758 dwelling units in the eleven (11) backward districts of the State (Purulia, Paschim
Medinipur, Purba Medinipur, Bankura, Jalpaiguri, Birbhum, South 24 Parganas, Malda,
Mursidabad, North Dinajpur and South Dinajpur). The proposal has been sanctioned by the
Planning Commission of the Government of India. The scheme has started in the year
2012-13.
The State is committed to provide affordable housing to people specially belonging to
Below Poverty Line (BPL), Economically Weaker Section (EWS), Backward Classes and
Minorities. As a step forward, West Bengal Housing Infrastructure Development
Corporation (WBHIDCO) with Bengal Shapoorji Housing Development Pvt Ltd is
engaged in the largest Public Private Partnership (PPP) housing project at New Town,
Rajarhat. This project 'Sukhobrishti' is largest in eastern India and meant for EWS and LIG
category of population.
3.4.2 Maharashtra
The State has taken special initiative to provide houses to the citizens belonging to the poor and
weaker sections of the society10. In order to overcome the housing problems in urban areas, the
State has established Maharashtra Housing and Area Development Authority (MHADA) and City
& Industrial Development Corporation (CIDCO) Limited. Besides this, the Slum Rehabilitation
Authority (SRA) has been set up with an objective of constructing houses for slum dwellers in
urban areas of the State. Indira Awas Yojana, Rajiv Gandhi Gramin Niwara Yojana, etc. are being
implemented in the rural areas of the State to provide quality houses to the people belonging to the
BPL families and weaker sections of the society.
10
Maharashtra Housing & Area Development Authority: MHADA plays an important

role in housing development by providing houses in Mumbai and some parts of the State at
affordable prices. Upto March, 2013, MHADA has constructed and redeveloped 4,34,538
dwelling units.
City and Industrial Development Corporation Limited: CIDCO is implementing

development programmes covering housing for all sections of the society and providing
infrastructures like schools, hospitals, community centers, etc. Upto December, 2013,
CIDCO has constructed a total of 1,78,128 tenements in Navi Mumbai, Aurangabad,
Nashik and Nanded.
The Economic Survey of Maharashtra 2013-14 (https://mahades.maharashtra.gov.in)

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Shivshahi Punarvasan Prakalp Ltd. (SPPL): SPPL, a Company fully owned by

Government of Maharashtra (GoM) was set up in 1998 with an objective of accelerating
slum rehabilitation. Upto November, 2013, 111 buildings comprising of 10,673 tenements
were constructed (of which 10,165 tenements have been allotted) incurring an expenditure
of ` 458 crore.
Beedi Kamgar Gharkul Yojana: The State is implementing Beedi Kamgar Gharkul
Yojana since July, 2001 for construction of houses at Solapur, Nashik, Pune, Kolhapur,
Nanded, Garkheda in Aurangabad and Kamtee in Nagpur for Beedi workers. Under the
Scheme, financial assistance of ` 40,000 per house is provided by Government of India
(GoI) and `25,000 per house is provided by Government of Maharastra (GoM). An amount
of ` 42.07 crore has been distributed to the seven beedi workers organizations for
construction of 19,847 houses. An amount of `2 crore is budgeted for the scheme in the
financial year 2013-14.
Indira Awas Yojana: Indira Awas Yojana (IAY) is being implemented in the State since
April, 1989 to construct the houses for houseless BPL families in the rural areas. It is a
centrally sponsored scheme with Central and State share in the ratio 75:25. The GoI has
fixed the cost of construction at `70,000 per house from April 01, 2013. However, GoM has
increased the total cost of each house to `1,00,000 and provides the additional amount
required to construct the house.Atarget of constructing 1,37,314 houses is fixed for the year
2013-14 for which GoI has sanctioned ` 720.90 crore, while the State has made a provision
of ` 689.94 crore. Upto January, 2014 construction work of 54,666 houses has been
completed incurring an expenditure of ` 732.89 crore. During 2012-13 in all 1,45,764
houses were constructed incurring an expenditure of `1,138.60 crore.
Rajiv Gandhi Gramin Niwara Yojana-I: This Scheme is being implemented in the State
for rural BPL families. Under this Scheme, grant of ` 68,500 is given to BPL beneficiaries to
construct their own houses. This Scheme is implemented through the District Rural
Development Authority of 33 Zilla Parishads. An amount of ` 93.21 crore was made
available for construction of 13,607 houses in 2011-12 and ` 380.24 crore for 55,428 houses
in 2012-13.
Revised Rajiv Gandhi Gramin Niwara Yojana-II: The State has decided to build
1,25,000 houses for APL beneficiaries in low income category under Revised Rajiv Gandhi
Gramin Niwara Yojana - II. The cost of each house is fixed at `1,00,000 of which, a loan of
`90,000 is provided through the apex bank in the district to the beneficiary and the
remaining ` 10,000 to be borne by the beneficiary. The interest component of the loan is
borne by the GoM, as subsidy.
3.4.3 Madhya Pradesh 11

l
11
Housing Policy, 2007: The Housing Policy of the State of Madhya Pradesh enunciated in
1995 was amended in 2007 due to change in demand for urban housing due to rapid
urbanization. Considering growing need for urban housing, provision for participation of
private and corporate sectors has been made in the policy to meet the requirement of social
housing in the state. Provision of providing government land at concessional rates for
development of habitations to construction agencies has also been made. The Policy
encourages PPP to meet the shortages of houses. Provision has been made to grant
The Department of Housing and Environment, Government of Madhya Pradesh (http://www.mphed.nic.in/)

115
permission for township development in agricultural areas scrapping the existing practice
of compulsion for diversion of lands. The Policy retained an emphasis on resolving the
housing problems of the economically weaker sections of society. The Policy stated that it
would encourage private entrepreneurs in these sectors; since Government recognized the
need to simplify and rationalize the rules and procedures that governed this sector.
l
Mukhyamantri Awas Yojana: The Mukhyamantri Awas Yojana has been started in
Madhya Pradesh with a view to providing dwellings to a large number of houseless
families. Financial assistance to 33,739 families has been made available for constructing
their own houses under the Scheme, which was launched in 2007. The Scheme has
benefited those houseless people who do not come under the ambit of IndiraAwas Yojana.
CM Infrastructure development programme (District Plan): For the urban poor

residents of slums, through PPP/new Scheme dwelling houses to be constructed in the
various towns of the Madhya Pradesh, so that every urban poor can get a suitable house with
better amenities.
Integrated Housing and Slum Development Project (IHSDP): This Centrally

Sponsored Scheme has been initiated by integrating the National Slum Development
Programme and Valmiki Ambedkar Housing Scheme under sector reforms plan in
December, 2005. Major objective of this Scheme is to provide the Urban Poor with
adequate housing and infrastructural facilities in the slum areas. This Scheme is being
implemented in the cities and towns other than those which are included in the JNNURM.
3.4.4 Gujarat12
12
Mukhya Mantri GRUH (Gujarat Rural Urban Housing) Yojana: The State
Government has launched the Mukhya Mantri GRUH (Gujarat Rural Urban Housing)
Yojana from the year 2012 - 13, with the noble objective of making cities slum free. This
Scheme also aims to provide affordable houses to people belonging to Economically
Weaker Sections and Lower Income Groups. Under the Mukhya Mantri GRUH Yojana, the
State Government has implemented Slum Rehabilitation Policy, 2013 based on Public
Private Partnership (PPP) for rehabilitation of slum dwellers. Affordable Housing Policy
has also been implemented to provide houses to people belonging to Lower or Middle
Income Groups.
Gujarat Slum Rehabilitation Policy - PPP - 2013: About seven lakh families reside in
slums in the urban areas of Gujarat. Hence, the Policy has been framed by the State
Government for in-situ rehabilitation of the slum dwellers families on public land by
providing houses of minimum 25 sq. meters carpet area with basic civic amenities, free of
cost through public private partnership. The slum dwellers' families that are living in slums
on or before December 01, 2010 will be considered as beneficiaries. The Policy defines the
roles and responsibilities of the Public Institutions and Private Developers and specifies the
incentives provided to the private developers associated with the slum rehabilitation
projects.
Gujarat Affordable Housing Policy - 2014: Through this Policy the State Government
aims to provide housing at reasonable price to poor urban families belonging to lower and
middle income group, by involving both public institutions and private developers in such
Urban Development and Urban Housing Department, Government of Gujarat (http://www.udd.gujarat.gov.in/)

116

projects. The Objectives of the Policy are (1) To construct 50 lakh houses in next five years
out of which 22 lakh houses are planned in urban area, and (2) To provide well planned
houses having basic civic amenities at affordable prices to EWS, LIG and MIG
beneficiaries.
3.4.5 Karnataka
The Department of Housing, Government of Karnataka has been implementing its own housing
programmes and also effectively implementing Centrally Sponsored Schemes13. Housing needs of
low income, middle income and high income groups are also catered to by the Department, apart
from housing for slum dwellers as a part of their rehabilitation and improvement of slum
programmes. Three organisations under the Department of Housing catering to housing needs of
the various sections of the society are:
l
Rajiv Gandhi Rural Housing Corporation Limited (RGRHCL): The RGRHCL was
established by the State Government in the year 2000 to implement all the State and Central
Government sponsored housing schemes for economically weaker sections of the society
both in rural and urban areas. The main objective of the Corporation is to provide affordable
housing for persons belonging to EWS and LIG.
Karnataka Housing Board (KHB): Established under Karnataka Housing Board Act,
1962 as a successor to Mysore Housing Board constituted in 1956. The primary objective of
KHB is to make such schemes and to carry out such works as are necessary for the purpose
of dealing with and satisfying the need of housing accommodation. With this directive,
KHB endeavours to provide housing to the people of Karnataka at affordable cost and is
therefore, recognized as the most important agency for housing throughout Karnataka.
Karnataka Slum Development Board: Constituted during July, 1975 under the
provisions of the Karnataka Slum Areas (Improvement Clearance) Act 1973. The main
objective of the Board is to provide basic amenities to the slum dwellers and shelter to the
needy in the slums.
14
Housing Programmes in the State of Karnataka
In 2013-14, the State has allocated `1,161.50 crore for the implementation of housing schemes, out of which an
amount of `1,033.44 crore has been released and `947.75 crore has been spent up to October, 2013.
l
Rural Ashraya/BasavaVasathiYojane: This Scheme was introduced by the State Government in

the year 1991-92 for providing the housing for rural houseless poor. The annual income of the
beneficiary is limited to `11,800/-. Presently, it has been enhanced to `32,000. From 2013-14 the
Government has fixed unit cost of `1.50 lakh, in which `1.20 lakh is subsidy from the State
Government and remaining `30,000/- is beneficiary contribution or bank loan. 50% of the target is
reserved for SCs/STs and 50% is for general categories. Under this Scheme, the RGRHCL has
constructed 2.76 lakh houses during the last 3 years. In 2013-14, the target is to complete 1.80 lakh
houses including backlog, of which 90,342 houses have been constructed upto October, 2013.
Ambedkar Housing scheme: This Scheme is implemented for rural houseless poor belonging to
SC/STs. The annual income of the beneficiary is limited to `32,000. The beneficiaries are selected
by the Gram Panchayats through Gram Sabhas. The unit assistance per house has been enhanced
13
14
http://housing.kar.nic.in/
Economic Survey of Karnataka 2013-14
117
from `40,000 to `63,500 from 2010-11 (`50,000 as subsidy,`10,000 as bank loan and `3,500
being beneficiary contribution).1.56 lakh houses have been constructed during 2000-01 to 201112. In 2013-14, the target is to complete 5,000 houses of which 2,644 houses have been constructed
upto October, 2013.
l
Indira Awas Yojana: This Centrally Sponsored Scheme was introduced in 1989-90. This scheme
is implemented for rural BPL houseless families. From 2013-14, the Government of India has
enhanced the subsidy per house to `70,000. Further, the State Government has enhanced the unit
cost to `1.50 lakh. In this `52,500 is subsidy from Central Government and `67,500 is subsidy
from State Government and remaining `30,000 is the beneficiary contribution or bank loan. The
Scheme is being implemented by the RGRHCL. From 2004-05 to 2012-13, 6.37 lakh houses have
been constructed upto October 2013. Upto October, 2013, 41,260 houses have been completed as
against the target of 1,00,000 houses for 2013-14.
Urban Ashraya Scheme: Urban Ashraya Scheme was introduced in 1991-92. It is a Statesponsored Scheme implemented for the urban poor. The annual income of the beneficiary should
be `32,000. The unit cost under this scheme is `30,000 in which `25,000 is a loan from
Government for all the beneficiaries and `5,000 is beneficiary contribution. The loan provided to
the beneficiaries is recovered in 180 monthly installments. During the period 2000-01 to 2011-12,
1.49 lakh houses have been completed. In 2010-11, this scheme was renamed as Vajpayee Urban
Housing Scheme. In 2013-14, the Government, has enhanced unit cost to `2 lakh per house, in this
`1.20 lakh is subsidy from the State Government, `30,000 is compulsory beneficiary contribution
and balance `50,000 is the bank loan or beneficiary contribution. In 2013-14, the target is to
complete15,000 houses against which 3,136 houses have been completed.
Nanna Mane (Affordable Housing for Low-income Groups): In 2010-11, the State had
introduced a new Scheme to benefit the people above poverty line by providing affordable houses
to the low income group families like auto drivers, film industry workers, unorganized sector
workers, beedi workers, street vendors, etc. The annual income of the beneficiary is limited to
`1.00 lakh. Four projects had been taken up in 2011-12 in an around Bangalore viz., Talaguppa
near Bidadi, Singanayakanahalli, Hunasamaranahalli and Kodathi under G+2 concept. The unit
cost of the flat is `3.90 lakh, `4.25 lakh and `5.20 lakh respectively for different floors.
3.4.6 Odisha
The State Government in the Housing and Urban Development Department has been making concerted
effort to tackle the problem of urban housing for the poor, lower and medium income groups. The various
housing schemes in the state of Odisha are15 :
l
Mo Kudia: The State Government has launched Mo Kudia Scheme from the year 2008-09. The
rural households whose name does not find place in the BPL list but are otherwise genuinely poor
may also be allotted a house in the joint name of spouse. Preference will be given to the following
categories :l
15
The poor women in distress, physically challenged, (over 40%), mentally challenged,
victims of domestic violence, destitute widows, women headed households, adult orphans
of Government registered institutions, victims of leprosy and AIDS will be eligible to get a
house.
The Housing & Urban Development Department, Government of Odisha (http://www.urbanodisha.gov.in/)

118

l
The poor victims of fire or flood can be considered.
The tribal households whose houses are "fully collapsed" due to elephant menace can be
considered.
The primitive tribes groups (PTG) may be given priority without instating on title of land.
The list of beneficiaries shall be placed before Palli Sabha for information to avoid duplication and
better targeting. Special provision has been made to cover the affected households whose house is
damaged due to Fire, Flood, Riot and Elephant Menace. Out of the total target, 25% is kept
reserved for the above people as Mo Kudia Special. This is allotted to the Districts over and above
the normal Mo Kudia Target. The unit cost of Mo Kudia House in 18 IAP Districts is `75,000/- and
12 Non IAP Districts is `70,000. State's achievement under Mo Kudia (Normal) during 2013-14
upto the end of March, 2014 is 18,668 as against a target of 38,998 houses, i.e. an achievement of
48 %.
l
Low Cost Housing Scheme under the National Welfare Fund for Fishermen (NWFF),
sponsored by the Centre, envisages better living amenities for poor fishermen. Under this Scheme,
model fishermen's villages are created and low cost housing and drinking water facilities are
provided. Since its inception in 1987-88, funds have been allotted for construction of 2,332 houses
and 1,989 units have been completed. Besides, two community halls have been completed and 32
tube wells have been installed. Under the Scheme, 1,500 low cost homes are targeted to be
constructed during 2012-13.
Housing Schemes Under Backward Region Grant Fund (BRGF) is a Central Scheme
launched in 20 (Twenty) Districts of Odisha viz: Balangir, Bargarh (included in 2012-13), Boudh,
Deogarh, Dhenkanal, Gajapati, Ganjam, Jharsuguda, Kalahandi, Kandhamal, Keonjhar, Koraput,
Malkangiri, Mayurbhanj, Nabarangpur, Nuapada, Rayagada, Sambalpur, Subarnapur and
Sundargarh of the State. 3,921 Gram Panchayats (GPs), 217 Panchayat Samitis (PSs), 1 Municipal
Corporation, 22 Municipalities and 50 Notified Area Councils (NACs) are covered under this
Scheme. This has a holistic objective of making the Housing programme for Economically
Weaker Section of people (EWS) more effective and to address the problem of regional
imbalances. In respect of housing for poor people special stress has been given to the backward
regions (Districts) of the state. During 2013-14, Government of India has again raised the annual
entitlement of 20 BRGF Districts to `417.01 crore under BRGF Development Grant.
119
Chapter 4
4.1

4.1.1 NHB was established in 1988, under the National Housing Bank Act, 1987, to operate as a
principal agency to promote housing finance institutions and to provide financial and other
support to such institutions. NHB is wholly owned by the Reserve Bank of India. One of the prime
objectives of the Bank is to establish and promote a sound and stable housing finance system in the
country. NHB is pursuing its charter and vision to shape and develop the housing finance market
in India along sustainable lines and promoting financial and institutional depth in the housing
finance sector. NHB is engaged in a range of activities that are key to the development of market
based solutions for low and moderate income housing segments. Its activities include building of
institutional framework and market infrastructure, which are critical for expansion and
stabilization of the housing finance system. Apart from its various promotional activities, NHB
also seeks to undertake measures that promote confidence amongst various stake holders. Under
the provisions of the Act, NHB as the regulator for the Housing Finance Institutions (HFIs), seeks
to promote sound and stable having finance system and its vision, mission and objectives are
derived accordingly.
Vision
"Promoting inclusive expansion with stability in housing finance market."
Mission
"To harness and promote the market potentials to serve the housing needs of all segments of the
population with focus on low and moderate income housing."
Objectives
4.1.2 NHB is a multifunctional Development Finance Institution (DFI) and performs a range of
activities including financing, regulation and supervision, and promotional initiatives. NHB
regulates and supervises the activities of housing finance companies in accordance with the
provisions of the Act. This includes registration of housing finance companies for conduct of
housing finance business, onsite and off-site supervision of housing finance companies, consumer
interface and protection and coordination with other regulators. NHB, through its multifunctional,
mutually synergistic and complementary roles, has broadened the scope and reach of the housing
finance system by integrating it with the broader financial sector and capital market.
4.1.3 Since inception, NHB has been working to facilitate the supply of affordable housing for the
"bottom of the pyramid" (BoP) and encourages broad-based home ownership through a right mix
of policy initiatives. Housing finance system in India has evolved and steadily grown through
various stages with NHB acting as a catalyst. NHB through its multi-functional role is engaged in
building the market infrastructure for efficient functioning. NHB is strongly committed towards
creating an appropriate environment for affordable housing and housing finance that can cater to
120
Chapter-4 Role of National Housing Bank

all segments of the population. At the same time, NHB continually seeks to contribute towards the
development of sustainable habitat and towards the promotion and preservation of environment
through energy efficiency and similar initiatives. In this regard, NHB continues to seek
partnership with domestic and international agencies towards the promotion and implementation
of such initiatives in the country. Through its various promotional and financing initiatives, NHB
is pursuing its Vision of "Promoting Inclusive Expansion with Stability in the Housing Finance
Market" and its Mission "To Harness and promote the market potentials to serve the housing needs
of all segments of the population with focus on low and moderate income housing". NHB has
sought to actualize its Vision through its focus on four broad areas of activities viz.
1.
Financing
2.
Promotion & Development of Market Infrastructure
3.
Expanding the Scope of low and moderate income housing, and
4.
Supervision of Housing Finance Companies
4.1.4 As a matter of conscious policy, NHB has judiciously combined its various roles viz. financing,
regulation and promotion, for optimum impact on the expansion and stability of the mortgage
market. NHB's programmes of financial assistance have focused on inclusive growth through
market based solutions and approach. In formulation and delivery of such solutions, NHB's
initiatives and policies have led the market towards greater efficiency and competition and wider
choice of institutional products for people in all income segments.
4.1.5 In the backdrop of huge housing shortage among lower income segments, NHB has adopted a
multi-pronged approach to tackle this problem. These include institution-building initiatives and
measures for creating conducive environment for innovative practices in sync with market
oriented approach.
4.1.6 Key aspects of NHB's business model for reaching lower income segments are:
1.
As a development financial institution, NHB provides equity and concessional loan

assistance to mortgage lenders for better home ownership among lower income
households.
2.
Initiatives on risk mitigation through mortgage credit guarantee institutions and funds,
which improve affordability for the borrowers as also encourage the lenders to increase
their exposure to these segments.
3.
Capacity building through training programmes, standard as well as customized, for

mortgage lending personnel at different levels.
4.
Information dissemination aimed at better market functioning and transparency through

advocacy and coordination with lending institutions.
121
4.2
Performance of National Housing Bank (July 01- June 30)

Picture 1: NHB's Financial Performance at a Glance
Table 5: Financial Highlights for the last six years

Year ended 30 th June
2009
2010
(Amount in ` crore)
2011
2012
2013
2014
450
450
450
450
450
450
1,792
2,072
2,352
2,739
3,190
3,631
Disbursements
10,889
8,160
12,035
14,454
17,635
17,890
Loans & Advances
16,851
19,837
22,581
28,519
34,603
39,932
Total Assets
19,927
22,732
25,781
31,332
38,721
45,050
Gross NPAs
Nil
Nil
Nil
184
184
Net NPAs
Profit After Tax
Nil
236
Nil
280
Nil
279
3
387
156
450
111
487
18
20
21
20
17
15
89
2.62
89
3.15
87
3.21
95
4.07
91
4.84
107
4.55
Capital
Reserves
CRAR (%)
No. of Employees
PAT per Employee
Table 6: Income expenditure and profitability trend in the last four years
Year ended 30th June
1. Total Income
2. Operating Expenses
3. Operating Profit (1 2)
4. Provisions & Contingencies
5. Profit Before Tax (3 4)
6. Provision for Tax
7. Profit After Tax (5 6)
2011
1,948
1,518
430
31
399
120
279
2012
2,488
1,889
600
56
544
157
387
122
2013
3,024
2,262
762
98
664
214
450
(Amount in ` crore)
2014
3,520
2,620
900
114
786
299
487
4.3
Resource Mobilization
4.3.1 NHB raised both short term and long term resources during the year. Short term resources
included issuance of Commercial Papers (CPs) and short term loans from Banks. Long term
borrowings includes issuance of Coupon Bonds, Rural Housing Fund (RHF), Deposits from
Housing Finance Companies (HFCs) and Deposits from public under (SUNIDHI and
SUVRIDDHI) term deposit schemes. The net incremental borrowing was ` 17,084 crore for the
year ended June 30, 2014. The total outstanding borrowing as on June 30, 2014 was ` 39,460
crore.
Table 7:
(Amount in ` crore)
Total Outstanding Borrowings as on June 30, 2014
Resource
Deposits from Public
Borrowings - CBLO
Urban Housing Fund (UHF)
Rural Housing Fund (RHF)
Foreign Borrowings
Borrowings from RBI
Term Loans
Loan Against Deposits
Bonds and Debentures
Total
Amount
268
2,337
1,000
17,278
904
13
5,945
540
11,175
39,460
Graph 4: Share of outstanding borrowings as on June 30, 2014
Bonds and
Debentures
28%
Deposits
from Public
1%
Borrowings
-CBLO
6%
UHF
3%
Loan
Against
Deposits
1%
RHF
44%
Term Loans
15%
Borrowings from
RBI
0.03%
Foreign
Borrowings
2%
123
4.3.2 Foreign Collaborations and Borrowings

4.3.2.1 NHB - World Bank Low Income Housing Programme: NHB has, in partnership with
World Bank through Government of India, initiated a programme to encourage the flow of
funds to the urban poor for their housing requirements. Under the programme NHB will be
receiving a loan of SDR 66.1 million (equivalent to USD 100 million) over a period of five
years from World Bank, which will be used to refinance the retail loans extended by the
Primary Lending Institutions (PLIs), that conform to the criteria laid down under the
programme. The Agreement was signed on August 14, 2013.
Following are the essential criteria prescribed under the Programme:
The loan size must be less than or equal to `5 lakh.
l
Annual Income of the Household to be less than or equal to `2 lakh
l
Loan to Value ratio to be less than or equal to 80%
l
The Dwelling Unit (DU) must be in urban area
l
No loan for plot purchase shall be eligible
l
The loans must meet the Social and Environment due diligence standard adopted under
the programme. NHB has claimed $4.85 million under the programme in the first tranche
and is in process of claiming $2.45 million under the second tranche.
4.3.2.2 NHB - DFID Affordable Housing Programme in Low Income States: NHB has
entered into a partnership with DFID (Department for International Development) of UK
vide agreement dated October 7, 2013 for supporting the cause of affordable housing in
the low income states of the country. The programme will seek to address both supply side
and demand side constraints to housing shortage in the country.
Under the demand side component, NHB shall provide for refinance to the eligible
Housing Finance Companies (HFCs) in respect of their housing loans extended to the
target segment. The households having an annual income of `4 lakh or less will be covered
under the programme. Housing loans to households deriving income from informal
sources shall be thrust area under the programme.
The programme is intended for Low Income States of the country viz. Bihar, Chhattisgarh,
Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and West Bengal.
4.3.2.3 NHB - KfW - Promotional Programme for Energy Efficient New Residential
Housing in India: This programme, the first of its kind in India, was undertaken in
partnership with the KfW Development Bank of Germany. The agreement was signed
between the organizations on December 31, 2010. A Line of Credit of 50 million was
provided by KfW to NHB for extending refinance assistance to primary lending
institutions in respect of their individual housing loans for energy efficient units.
For facilitating the calculation of potential energy savings by a household under the
Programme, an assessment tool was specifically developed by Fraunhofer IBP, Germany
and The Energy and Resources Institute (TERI), who were engaged as external experts.
Based on the level of energy savings by way of adoption of various energy efficient
124

parameters (active and passive measures), certification was provided to the potential
individual borrowers for use in the loan procurement process. The certification and
accreditation for projects under the Programme was provided by Fraunhofer, IBP and
TERI.
Logo and branding for the energy efficient units certified under the Programme has been
unveiled, which shall help in providing further recognition to the Programme. A separate
website for the programme www.ee-homes.com has been launched for disseminating
information about energy efficiency in general and the Programme in particular. Several
training programmes and seminars have been conducted for capacity building and
awareness generation. The full amount of 50 million has now been utilized, providing
refinance in respect of 2,065 dwelling units.
Refinance Operations
4.4.1 Refinance Sanctions and Disbursements
During the year 2013-14, refinance disbursements aggregated `17,856.18 crore as against the
sanctioned limits (including the carried forward limits) of `31,548.09 crore.
Table 8: Refinance Sanctions and Disbursements for the years 2012-13 and 2013-14
(Amount in ` crore)
Institution
Category
Sanctions
Disbursements
2012-13
2013-14
2012-13
2013-14
HFCs
10,678.20
11,414.70
7,693.51
9,632.99
SCBs
Cooperatives
21,354.60
19,552.70
9,459.33
7,942.72
45.00
215.00
0.00
0.00
RRBs
652.08
32,729.88
365.69
31,548.09
388.80
17,541.64
280.47
17,856.18
Total
Graph 5: Refinance Sanctions for the years 2012-13 and 2013-14
35000
Amount in ` Crore
4.4
30000
25000
2012-13
20000
2013-14
15000
10000
5000
0
HFCs
SCBs
Cooperatives
125
RRBs
Total
Amount in ` Crore
Graph 6: Refinance Disbursements for the years 2012-13 and 2013-14
20000
15000
2012-13
2013-14
10000
5000
0
HFCs
SCBs
Cooperatives
RRBs
Total
As can be inferred from the above table and graphs, in case of HFCs, sanctions and disbursements increased
over the previous year, whereas for SCBs and RRBs there was a fall in the figures of sanctions and
disbursements. In case of Cooperative Institutions, though there is increase in the sanctions in comparison to the
previous year but like previous year there were no disbursement made to them in the current year as well.
The disbursements made in 2013-14, aggregating ` 17,856.18 crore, represented the highest figure of refinance
disbursements achieved during any one year, registering a marginal increase of approximately 2% over the
previous year's refinance disbursements.
4.4.2
Cumulative Disbursements
The cumulative refinance disbursements as on June 30, 2014 were ` 1,20,485 crore, with the maximum share
with SCBs, followed by HFCs, Co-operatives and the RRBs, and the break-up is given below:
Table 9: PLI- wise break-up of cumulative disbursements as on June 30, 2014
Amount in ` crore
PLIs
% of Total
Housing Finance Companies
51,569
42.80
Scheduled Commercial Banks
64,968
53.92
1,423
2,525
1.18
2.10
120,485
100.00
Regional Rural Banks

Cooperatives
Total
Graph 7: PLI-wise break-up of cumulative disbursements as on June 30, 2014

1.18% 2.10%
Housing Finance
Companies
42.80%
53.92%
Scheduled Commercial
Banks
Cooperative Sector
126

Trend on refinance disbursements between 1999 and 2014
Graph 8: Trend in NHB's refinance disbursements between 1999 and 2014
140000
120000
100000
Amount in ` Crore
4.4.3
Disb.
80000
60000
Cumm.
Disb.
40000
20000
0
Table10: Trend in NHB's refinance disbursements between 1999 and 2014

(Amount in ` Crore)
Year
Disbursement
Cumulative
Disbursement
1999 -00
2000 -01
2001 -02
2002 -03
2003 -04
2004 -05
2005 -06
2006 -07
842
1,008
1,025
2,710
3,253
8,062
5,632
5,500
4,235
5,243
6,268
8,978
12,231
20,293
25,925
31,425
2007 -08
8,587
40,012
2008 -09
10,854
50,866
2009 -10
8,108
58,974
2010 -11
11,723
70,697
2011 -12
14,390
85,087
2012 -13
17,542
102,629
2013 -14
17,856
120,485
127
4.4.4
Tenure wise Breakup of Disbursements

Table 11 : The tenure-wise breakup of disbursements during FY 2012-13 and 2013-14
2012 -13
Tenure (years)
Amount in
` crore
Upto 1 year
2013 -14
% to
Total
Amount in
` crore
% to
Total
0.00
0.00
448.33
2.51
More than 1 year and upto 3 years
5786.85
32.99
5444.00
30.49
More than 3 years and upto 5 years
2668.22
15.21
1445.19
8.09

3613.18
4157.39
20.60
23.70
4408.94
1754.39
24.69
9.83
Over 10 years
1316.00
7.50
4355.33
24.39
17541.64
100.00
17856.18
100.00
Total
Table 12: Disbursements made during 2013-14 and outstanding as on 30.06.2014, based on type
of interest rate
(Amount in ` crore)
Disbursements
during 2013 -14
% of Total
Outstanding
as on
30.06.2014
% of Total
Fixed Rate
12,956.37
72.56
28,413.01
72.04
Floating Rate
4,899.81
17,856.18
27.44
11,024.86
39,437.87
100.00
Type of Interest Rate
Total
100.00
27.96
Table 13: Breakup of refinance disbursements in 2013-14, based on size of underlying individual
housing loans
Amount
in `crore
Individual Loan Size
% of Total
Upto` 2 lakh
1,455.33
8.15
More than ` 2 lakh and upto ` 5 lakh
2,004.93
11.23
2,712.37
15.19
6,188.34
34.66
2,249.51
12.60
Over ` 25 lakh
2,930.70
16.41
315.00
1.76
17,856.18
100.00
Prospective
Total
128

As is evident the maximum refinance disbursements were in the loan-slab of `10 lakh to` 15 lakh,
and almost 82% of refinance disbursements went towards priority housing.
Table 14 : Area-wise trend in refinance disbursed against the individual housing loans
between 2009 and 2014.
(Amount in ` crore)
Year
Total Disbursements
Rural
Amount
Urban
% to Total
Amount
% to Total
2009 -10
8,107.76
3,695.82
45.58
4,411.94
54.42
2010 -11
11,722.79
5,785.58
49.35
5,937.21
50.65
2011 -12
14,389.91
5,607.54
38.97
8,782.37
61.03
2012 -13
17,541.64
7,717.60
44.00
9,824.04
56.00
2013 -14
17,856.18
7,689.97
43.07
10,166.21
56.93
Table 15: Scheme-wise trend in Disbursements under NHB's Refinance between 2011 and
2014
(Amount in ` crore)
Name of the Refinance Scheme
Regular Scheme
2011 - 12
8,782.37
2012 - 13
9,692.55
2013 - 14
7,599.34
3,003.03
4,027.42
3,527.31
2,604.51
3,690.18
4,162.66
Energy Efficient Housing (EEHRS)
103.77
197.48
Low Income Housing Scheme (LIH)
24.37
540.98
Solar Equipment Scheme
3.35
Refinance for Construction Finance (RCF)
Urban Housing Fund (UHF)
890.10
Refinance Scheme for Women (Women)
938.31
14,389.91
17,541.64
17,856.18
Rural Housing Fund (RHF)

(Housing + Solar)
Golden Jubilee Scheme (GJRHRS)
Total
Table 16: Trend in refinance disbursements made to different catagories of Primary lending
Institutions between 2009 and 2014
(Amount in ` crore)
Year
HFCs
SCBs
UCBs
2009 -10
3,543.80
4,150.00
189.00
184.96
40.00
2010 -11
3,308.67
8,112.00
168.00
134.12
0.00
11,722.79
2011 -12
5,302.13
8,851.42
93.32
143.04
0.00
14,389.91
2012 -13
7,693.51
9,459.33
0.00
388.80
0.00
17,541.64
2013 -14
9,632.99
7,942.72
0.00
280.47
0.00
17,856.18
129
RRBs
Cooperatives
Total
8107.76
Graph 9:
Trend in refinance disbursements made to different categories of primary lending

institutions between 2009 and 2014
12000
Amount in ` crore
10000
HFCs
8000
SCBs
6000
UCBs
RRBs
4000
Coop. Sector
2000
0
2009-10
2010-11
2011-12
2012-13
2013-14
As can be gauged from the Table and Graph in the last five years, Scheduled Commercial Banks
have been constituting the biggest category of PLIs (Primary Lending Institutions) availing
refinance from NHB (except for the current year i.e. 2013-14 when the HFCs constituted the
biggest category). The possible reasons can be that the Banks, due to their size, branch network
and captive customer base and knowledge of the retail finance segment, are able to act more
aggressively as compared to other PLIs. In the HFC sector, barring a few large sized HFCs, most
of the players are quite small and have limited regional presence, and are therefore not able to
compete equally with banks on the outreach as well as cost. However, along with such constraints
notwithstanding, HFCs have been performing well during the last few years, expanding their
customer base and housing loans portfolio while keeping their NPA levels under control, resultant
of which they have surpassed the SCBs in terms of availing refinance from NHB in the year
2013-14.
The refinance assistance to the cooperatives has been negligible during the last few years. This is
on account of declining levels of recovery and losses incurred by these institutions, which has
made most of the cooperative institutions ineligible for availing refinance assistance from NHB.
Further, the competition from Banks and HFCs has had its impact on the lending by ACHFS and
ARDBs.
4.4.5 Energy Efficient Housing
NHB, in partnership with KfW, Germany, is promoting energy efficiency in the housing sector. In
2010-11, NHB has launched the Energy Efficient Housing Refinance Scheme, aimed at
encouraging energy efficiency in the residential sector. The objective of the Scheme is to provide
refinance assistance to PLIs including Banks, HFCs etc. in respect of their direct lending to
individuals for purchase/construction of new energy efficient housing units in urban areas. Direct
Housing loans sanctioned and disbursed after January 01, 2011 by the PLIs to individuals in urban
areas having energy efficiency (EE) certificate recognized by NHB in consultation with KfW
(based on Fraunhofer/TERI Toolkit), are eligible under the Scheme. The building projects which
are designed in a way that fulfill the energy efficiency requirements are included under the
promotional programme. The refinance assistance under the Scheme aims at improving the
demand for energy efficient residential units. NHB has disbursed refinance amounting to `430.21
crore against 2130 units under this Scheme.
130

Table 17: Trend in disbursements made by NHB under Energy Efficient Housing Refinance
Scheme
Amount in ` Crore
Year
2011 -12
128.96
2012 -13
103.77
2013 -14
197.48
Total
430.21
4.4.6 Rural Housing Fund

The Hon'ble Finance Minister, in the Union Budget speech for 2008-09, announced the setting up
of the Rural Housing Fund (RHF) to enable primary lending institutions to access funds for
extending housing finance to targeted groups in rural areas at competitive rates. The corpus of the
fund for 2008-09 was ` 1,778.18 crore, which was enhanced to ` 2,000 crore each for 2009-10 and
2010-11, ` 3,000 crore for 2011-12, ` 4,000 crore for 2012-13 and further to ` 6,000 crore for
2013-14. So far, 1.23 million dwelling units were financed under this Fund.
Table 18 : Trend in allocation and utilization of RHF
(Amount in ` crore)
Utilization by different Institutions

Year
Allocation
HFCs
SCBs
UCBs
RRBs
ACHFS &
ARDBs
Total
No. of
Units
2008 -09
1,778.18
1,544.88
0.00
15.00
201.60
0.00
1,761.48
95,577
2009 -10
2,000.00
1,794.86
0.00
4.00
184.96
32.00
2,015.82
70,995
2010 -11
2,000.00
1,687.54
182.00
0.00
134.12
0.00
2,003.66
42,859
2011 -12
3,000.00
2,125.25
721.42
13.32
143.04
0.00
3,003.03
1,26,795
2012 -13
4,000.00
1,939.94
1,802.03
0.00
285.45
0.00
4,027.42
3,56,480
2013 -14
6,000.00
2,409.80
1,023.39
0.00
94.12
0.00
3,527.31
5,35,299
18,778.18
11,502.27
3,728.84
32.32
1,043.29
32.00
16,338.72
12,28,005
Total
4.4.7 New Refinance Schemes Launched

NHB has launched the following two new schemes during the year 2013-14.
l
Refinance Scheme for Women: In order to improve the flow of formal housing finance to women
in urban areas, NHB has launched a Special Refinance Scheme for Women, whereby the retail
lending institutions are encouraged to improve their housing finance to women borrowers. This
Scheme will help in encouraging women to acquire residential property in their own name,
131
thereby enabling their empowerment. The Scheme envisages providing refinance assistance to
PLIs at concessional rates in respect of their housing loans where the primary borrower is a woman
and the property is solely or jointly owned by women. Refinance under the Scheme would be
available at concessional interest rates upto of 100 bps below the NHB's Prime Lending Rate. The
interest rate concession would be offered in a graded manner, with emphasis being placed on
encouraging lower ticket size loans. The Scheme is being implemented through all eligible PLIs
having pan India presence. During the year 2013-14, NHB has made disbursement of ` 938.31
crore under the Scheme.
l
Urban Housing Fund : In the Union Budget 2013-14, the Hon'ble Finance Minister has made the
announcement regarding the establishment of an Urban Housing Fund (UHF), having the corpus
of `2,000 crore. Accordingly, NHB has formulated a new refinance Scheme for channelizing
funds into the urban housing sector. The Scheme seeks to augment resources and improve credit
availability and meet the housing needs of the people in lower income segments residing in urban
areas. During the year 2013-14, NHB has made disbursement of ` 890.10 crore under the Scheme.
(Amount in ` crore)
Table 19: Allocation and utilization of UHF

Year
4.5
Allocation
Utilization by different Institutions
HFCs
SCBs
UCBs
RRBs
ACHFS &
ARDBs
Total
No. of
Units
2013 -14
2000.00
145.60
744.50
0.00
0.00
0.00
890.10
18310
Total
2000.00
145.60
744.50
0.00
0.00
0.00
890.10
18310
Sanctions and Disbursements through Direct Finance

NHB provides direct financial assistance for project lending to a range of borrowers in the public and
public-private partnership, microfinance institutions, state level housing boards and area development
authorities for integrated housing projects and slum redevelopment projects.
4.5.1 Project Finance and Technology Promotion
During the year 2013-14, NHB has sanctioned project finance assistance for one project
amounting to ` 125 crore and disbursed ` 34.26 crore. The disbursements were made to public
agencies and dairy cooperatives.
4.5.2 Housing Micro Finance Programme
NHB's Housing Micro Finance (HMF) programme started in 2004-05. Through housing
microfinance, NHB has been providing long term financial support, technical assistance and
training for housing finance for low income families. Under the programme, NHB has sanctioned
`101.68 crore to 31 Microfinance Institutions spread across 11 states for financing 40,210 urban
and rural housing/sanitation units. The beneficiaries include farmers, petty traders, artisans, dairy
workers and other low income households. More than 90% of the beneficiaries are women.
4.5.3 Cumulative Performance (Excluding project refinance)
Till June 30, 2014, 445 projects were sanctioned with project costs of ` 8,189.37 crore having loan
components of `5,121.92 crore to provide low income housing for the poor and has financed
132

various agencies, including Public Housing Agencies, MFIs, NGOs, and Public Private
Partnership projects. Till June 30, 2014, NHB has disbursed ` 2,233.54 crore as project finance.
Table 20: Trend in Project Finance Disbursements made by NHB between 2002 and 2014
(Amount in ` crore)
Year
Sanctioned
Amount
Disbursement
Amount
2002 -2003
84.46
73.06
2003 -2004
83.80
44.49
2004 -2005
197.82
27.16
2005 -2006
537.29
364.55
2006 -2007
560.82
171.60
2007 -2008
819.50
449.49
2008 -2009
248.30
35.41
2009 -2010
312.07
51.53
2010 -2011
78.80
311.78
2011 -2012
314.30
63.72
2012 -2013
154.26
92.89
2013 -2014
125.00
34.26
No. of
Houses
Benefited
Category to which
Funding viz. MFI,
PPP etc .
Cumulatively Category of Funding

includes:
NHB has
Housing Boards,
extended
Development
financial
Authorities, Municipal
assistance
Corporations, State
for
construction Housing Corporations,
Welfare Housing
of houses
Organizations, Micro
and housing
Finance Institutions,
related
Non-Governmental
infrastructure
Organizations, Dairy
for around
Cooperatives and
1,25,000
Public Private
houses
Partnership
Companies
4.5.4 External Commercial Borrowings forAffordable Housing Projects

In terms of the RBI Circular A.P. (DIR Series) Circular No. 61 dated December 17, 2012, relating
to the External Commercial Borrowings (ECB) policy, it has been decided to allow ECB for low
cost affordable housing projects as a permissible end-use, under the approval route. ECB can be
availed of by developers/builders for low cost affordable housing projects. As per the extant
circular, "Builders/developers meeting the eligibility criteria shall have to apply to the NHB in the
prescribed format. NHB shall act as the nodal agency for deciding a project's eligibility as a low
cost affordable housing project, and on being satisfied, forward the application to the Reserve
Bank of India for consideration under the approval route. In the year 2013-14, NHB has forwarded
two proposals from Developers for USD 18 million to RBI under these guidelines.
4.6
Regulation and Supervision

The Bank regulates and supervises the Housing Finance Companies (HFCs) in public interest, as per
provisions of the National Housing Bank Act, 1987. As on June 30, 2014, the total number of HFCs
registered with NHB stood at 59, of which 18 HFCs have been provided the Certificate of Registration
(CoR) with permission to accept public deposits and the balance 41 HFCs have been granted the CoR
without permission to accept public deposits. Of the 18 HFCs, which have been provided the CoR with
permission to accept public deposits, 6 are required to obtain prior written permission from the NHB
before accepting any public deposits.
133
NHB's regulation and supervision is aimed at preventing the affairs of any HFC being conducted in a
manner detrimental to the interest of the depositors and prejudicial to the public interest. As a part of
regulations, NHB has also issued the Directions, Guidelines for the Asset Liability Management System
in HFCs, Know Your Customer (KYC) and Anti Money Laundering (AML), Fair Practice Code, etc., and
Circulars to the HFCs and their auditors, from time to time, in addition to the provisions contained in the
Act. NHB also undertakes on-site inspection and off-site surveillance of HFCs through its supervisory
mechanism to ensure safety and soundness of HFCs.
Further, to provide value to the stakeholders, a Complaint Redressal Cell has been set up to redress the
grievances of the customers of HFCs. Recently, NHB has implemented Grievance Registration and
Information Database System (GRIDS) to enable the customer of HFC to register complaints online and
track the same. In order to contain frauds in housing finance, NHB, regularly disseminates the
information on frauds relating to mortgages to HFCs through Caution Advices, and also interacts with
other regulators for market feedback.
Box 5: Grievance Registration and Information Database System (GRIDS)
NHB has set up Complaint Cell to ensure prompt redressal of customer complaints and grievances against
H F C s , a n d a l s o u p l o a d e d t h e c o m p l e t e d e t a i l s o n i t s We b s i t e
(http://www.nhb.org.in/Regulation/Complaint_Cell) regarding role of the Complaint Cell for addressing
the complaints received from customers of HFCs.
Dr. Gurdial Singh Sandhu, IAS, Secretary to Government of India, Ministry of Finance, Department of
Financial Services launched the Grievance Registration & Information Database System (GRIDS) on
July 1, 2014. GRIDS is now available to customers of HFCs for 24x7 on-line lodging of their grievances.
GRIDS, developed by NHB, is a 24x7 on-line database system, which facilitates mainly the customer of
HFC to lodge a complaint, and also track its status. GRIDS enables instant on-line updating of response to
a complaint by HFC/NHB and also facilitates in viewing the latest status at any time by the
Complainant/HFC/NHB from a centralized database. This would not only bring about transparency in
Grievance Redressal Mechanism, but also reduce turnaround time of the disposal of complaints.
The Bank is also the member organization of Centralized Public Grievance Redress and Monitoring
System (CPGRAMS) of Department of Administrative Reforms and Public Grievances (DARPG), which is
aimed at providing the citizens, a platform for redressal of their grievances. The complaints received on
the Portal related to NHB are being monitored on a regular basis and are promptly disposed off.
During the financial year 2013-14, a total of 668 complaints were received by the Bank and out of which
580 were closed, and the remaining have been under regular monitoring for their early disposal.
4.7
Promotion and Development

NHB participates in various Government Programmes/ Schemes as Nodal Agency, etc., and network
with PLIs on their implementation.
134

4.7.1 Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)
Till June 30, 2014, as nodal agency, NHB has disbursed NPV of subsidy amounting to `8.67 crore
covering 9,534 beneficiaries under the Scheme.
Table 21: NPV subsidy disbursed by NHB between 2009 and 2014, under ISHUP
( Amount in ` crore)
Year
Total
2009 -10
2010 -11
2011 -12
2012 -13
2013 -14
NPV Subsidy disbursed
0.37
3.41
2.89
1.18
0.82
8.67
No. of Beneficiaries
531
4,611
2,987
755
650
9,534
4.7.2 1% Interest Subvention Scheme

NHB and RBI, as nodal agencies, disbursed the interest subvention to beneficiaries through banks
and HFCs, and the details during the tenure of the Scheme are shown below:
Table 22: Disbursement of subsidy to PLIs, under 1% Interest Subvention Scheme between
(Amount in ` crore)
2010 and 2013
1% Interest Subvention Scheme
Year
Banks
HFCs
Total
2010 -11
21.22
17.32
38.54
2011 -12
170.14
129.86
300
2012 -13
318.29*
102.58*
420.87*
* Includes disbursements made in FY 2013-14.
4.7.3 Rajiv Rinn Yojana

Under RRY, 7 MOUs have been signed by Primary lending Institutions (PLIs) with NHB, which
is one of the nodal agency for implementation of the Scheme.
4.7.4 Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH)
In pursuance of the Budget announcements in FY 2010-11 and 2011-12, the Ministry of Housing
and Urban Poverty Alleviation (MoHUPA), Government of India has set up and registered Credit
Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) on May 01, 2012 and the same
has also been notified by MoHUPA, GoI vide Gazette Notification dated July 7-13, 2012. The
Trust has been set up with an objective to ensure better flow of institutional credit for housing in
urban areas to cater to the needs of the targeted segments (EWS/LIG borrowers).
The Trust has an initial Corpus Fund of ` 1 lakh contributed by the Settler. Further contribution
will be made to the initial corpus by the Settler and the State Governments, who draw on it in
accordance with slum population, i.e. ` 1,000 crore in the aggregate by the Settler and ` 200 crore
135
by the State Governments. As on date MoHUPA, GoI as settler, has contributed `150 crore
towards the corpus fund of the Trust.
CRGFTLIH provides guarantee for housing loan upto `5 lakh sanctioned and disbursed by the
lending institutions without any collateral security and/or third party guarantee to the new
borrowers in the EWS/LIG categories in urban areas for home improvement/acquisition and
purchase of new or second hand dwelling unit/construction/extension of an affordable dwelling
unit with carpet area not exceeding 430 sq.ft.(40 sq.m.). The guarantee cover available under the
scheme is to the extent of 90% of the sanctioned housing loan amount upto ` 2 lakh and 85% for
loan amounts above ` 2 lakh and upto ` 5 lakh. The lending institutions eligible to avail benefit of
the Guarantee cover under the Scheme of the Fund Trust are Scheduled Commercial Banks,
Regional Rural Banks, Urban Co-operative Banks, NBFC-MFIs, Apex Cooperative Housing
Finance Societies registered under the State Co-operative Societies Act and Housing Finance
Institutions registered with NHB.
Till June 30, 2014, 47 institutions have signed MoU with the Trust under the Scheme. During the
period, the Trust has issued guarantee cover in respect of 116 loan accounts of 4 Member Lending
Institutions (MLIs) involving a total loan amount of ` 3.28 crore provided to EWS/LIG
households. These MLIs are Canara Bank, Oriental Bank of Commerce, Syndicate Bank and
GRUH Home Finance Ltd. The state wise and income group wise bifurcation of EWS/LIG loan
accounts against which the Trust has issued the Guarantee cover to MLIs is shown in Table below.
Table 23: State-wise and Income group-wise bifurcation of EWS and LIG loan accounts
against which the Trust has made the Guarantee cover to MLIs
Sr. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Category of Borrowers
EWS
LIG
0
1
1
0
2
6
1
0
0
2
0
1
1
47
2
2
1
7
1
2
26
2
0
3
1
7
36
80
Name of State
Jharkhand
Telangana
Kerala
Pondicherry
Tamilnadu
West Bengal
Gujarat
Uttar Pradesh
Madhya Pradesh
Haryana
Karnataka
Rajasthan
Maharashtra
Total
Total No. of
Borrowers Covered
1
1
8
1
2
1
48
4
8
3
28
3
8
116
4.7.5 Golden Jubilee Rural Housing Finance Scheme (GJRHFS)

GJRHFS has been conceptualized to address the problem of rural housing through improved
access to housing credit, which would enable an individual to build a modest new house or make
improvement or addition to his old dwelling in rural areas. The progress under the Scheme is
monitored by NHB and is reported to the Government of India on quarterly basis. The
performance of Banks and HFCs is a regular Agenda Item in the Meeting of the CEOs of HFCs,
Banks and select RRBs conducted by NHB on a half yearly basis. Since its inception in 1997, it has
been successful in its endeavor as vindicated by the fact that over 4.2 million units have been
financed. The annual targets under the Scheme (in terms of number of units financed) are set by
NHB and further NHB monitors its implementation. The targets under the Scheme have been
increased in a phased manner from 50,000 units in 1997-1998 to 3, 75,000 units in 2011-2012 and
136

to 4,50,000 units in 2013-14. Cumulatively in the period 1997-2014, a total of 42,93,457 dwelling
units were financed as against the target of 45,80,000 dwelling units, with an achievement of
around 93.74 per cent of the target.
Table 24: Trend in performance of GJRHFS, since inception
Year
Target
(No. of Units)
50,000
1,00,000
1,25,000
1,50,000
1,75,000
2,25,000
2,50,000
2,50,000
2,75,000
3,30,000
3,50,000
3,50,000
3,50,000
3,75,000
3,75,000
4,00,000
4,50,000
45,80,000
1997 -1998
1998 -1999
1999 -2000
2000 -2001
2001 -2002
2002 -2003
2003 -2004
2004 -2005
2005 -2006
2006 -2007
2007 -2008
2008 -2009
2009 -2010
2010 -2011
2011 -2012
2012 -2013
2013 -2014
Total
Achievement
(No. of Units)
51,272
1,25,731
1,41,363
1,58,426
1,87,268
1,78,200
2,43,753
2,58,562
2,98,651
2,98,426
2,71, 537
2,58,265
3,87,792
2,93,721
3,37,623
4,18,896
3,83,971
42,93,457
Achievement
against target (%)
102.54
125.73
113.09
105.62
107.01
79.20
97.50
103.42
108.60
90.43
77.58
73.79
110.80
78.33
90.03
104.72
85.32
93.74
Disbursements
Amount in `crore
N.A.
N.A.
N.A.
N.A.
3246.03
3816.34
6353.82
6440.95
8367.86
7664.58
8844.81
10337.88
15,565.24
14,781.18
17,226.91
24422.68
18,867.88
20
19
99
-2
-1
99
98
-1
19
97
19
0
00 00
-2
20 001
01
20 200
02 2
-2
20 003
03
20 200
04 4
-2
20 005
05
20 200
06 6
-2
20 007
07
20 200
08 8
20 200
09 9
-2
20 010
10
20 -201
11
1
-2
0
20 12
12
-2
20 013
13
-2
01
4
99
9
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Number of Units
Graph 10: Trend in performance of GJRHFS, since inception
Target
Acheivement
4.7.6 Reverse Mortgage Loan and Reverse Mortgage LoanAnnuity

NHB continues with its endeavors to promote the Reverse Mortgage Loan (RML) and Reverse
Mortgage Loan Annuity (RMLA) by way of Counseling Programmes and Seminars for elderly
citizens of the country to generate awareness amongst them for enabling them to take informed
decision before availing the product. During 2013-14, NHB organized and conducted 5 Seminars,
besides participation in 1 Workshop for the senior citizens in various cities of India.
137
Till date, NHB has fifteen RML Counseling centers, out of which two were opened during the year
2013-14. These counseling centers are at Ahmedabad, Bengaluru, Bhopal, Bhubaneswar,
Chandigarh, Chennai, Delhi (2), Hyderabad, Kolkata, Lucknow, Mumbai, Nagpur, Pune and
Patna. These centers are being run by NHB in association with eminent Non-Government
Organizations (NGO's) working for the elderly. NHB has also been working towards building the
capacities in the commercial banks and HFCs for implementing the product by way of its training
programmes and seminars for the personnel of these institutions.
NHB has been carrying on with its advocacy on the various issues concerning implementation of
the RML/RMLA. Significant among them was the issue relating to tax exemption of the payment
received under RMLA by the senior citizen borrowers. 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,
eligible for tax exemption.
4.8
Capacity Building
NHB regularly undertakes various measures towards training and capacity building of various
stakeholders in the sector. This includes regular interaction with various PLIs in forums like the CEOs'
meetings, Round Table discussions, etc., apart from imparting and conducting various training
programmes.
NHB organized 25 programmes during 2013-14 for officers of Housing Finance Companies and Banks,
Regional Rural Banks and Urban Cooperative Banks, which is the highest in any calendar year since
inception. A total of 797 participants from various PLIs participated in NHB's programmes. The Training
Programmes organized were spread throughout the the country viz. Ahmedabad, Aizwal, Akola,
Bengaluru, Bhubaneswar, Chennai, Gurgaon, Guwahati, Hyderabad (2 programmes), Indore, Kadpa,
Lucknow, Madurai, Mumbai (2 programmes), Mysore, Nagpur, Neharlagun, Nellore, Puducherry,
Raipur, Shillong, Udaipur and Warangal.
A dedicated programme for Women Executives was also held at Mumbai on 'Mortgage Finance for
Homes'. NHB is also conducting Training Programmes for RRBs and UCBs. To have maximum impact,
the programme is customized for the participants of specific RRB, based on its requirment. This also
helps in focussing the discussions on specific areas. The initiative highlights NHB's commitment
towards capacity bulding in housing finance sector. The programmes for RRBs/UCBs in Hindi speaking
areas were conducted in Hindi. The feedback received from the participants has been very good and
encouraging.
138

Table 25: Trainings conducted by NHB in 2013-14
S.No.
Program Details
Location
Date
No. of
Participants
1.
Orientation in Housing Finance
Bengaluru
July 11 -12, 2013
35
2.
Rural Housing Finance
Guwahati
July 25 -26, 2013
31
3.
Warangal
August 5-6, 2013
32
4.
Hyderabad
August 7-8, 2013
42
5.
Retail Assets -NPA Management &

Recoveries
Hyderabad
23
Mumbai
8.
Mortgage Finance for Homes (for Women

Executives)
August 19 -20,
2013
August 26 -27,
2013
September 26 -27,
2013
October 7 -8,
2013
9.
Housing Finance for UCBs
Nagpur
October 9, 2013
20
10.
Udaipur
11.
Documentation for Housing Loans
12.
13.
Legal Issues in Housing Finance
14.
Rural Housing Finance Pandyan Grama Bank
15.
Prevention of Fraudulent Practices in

Housing Finance
Rural Housing Finance Chhattisgarh Rajya
Gramin Bank
RHF Odisha Gramya Bank
6.
7.
Indore
Akola
41
29
35
18.
Risk Management & Asset Liability

Management
October 24 - 25,
2013
Chennai
November 11 - 12,
2013
Gurgaon
November 19 - 20,
2013
Puducherry
December 28 - 29,
2013
Madurai
January 06 - 07,
2014
Shillong
January 30 - 31,
2014
Raipur
February 06 -07,
2014
Bhubaneswar February 20 - 21,
2014
Ahmedabad
February 27- 28,
2014
19.
RHF Andhra Pragathi Grameen Bank
Kadapa
April 10-11, 2014
35
20.
RHF Andhra Pragathi Grameen Bank
Nellore
April 21-22, 2014
39
21.
Regulatory Frame work for HFCs
Lucknow
May 08-10, 2014
38
22.
RHF Mizoram Rural Bank
Aizawl
May 19-20, 2014
21
23.
RHF Arunachal Rural Bank
Neharlagun
May 23 -24, 2014
23
24.
KYC - FPC and Customer Service
Mysore
June 5 - 6, 2014
35
25.
Housing Finance for UCBs
Mumbai
June 20, 2014
32
16.
17.
Total Participants
29
42
28
38
31
38
25
24
31
797
139
Chapter 5
Operations and Performance of Housing
Finance Institutions
Housing Finance Companies (HFCs), specialized lending institutions for housing, registered with
NHB were one of the major players in the mortgage market in India. As on March 31, 2014, there were
58 HFCs registered under Section 29A of the National Housing Bank Act, 1987. They had a network of
2,510 branches and other offices spread across the country. In addition, few HFCs had their
representative offices for liaison work, in abroad.
The growth in outstanding housing loan portfolio of HFCs was encouraging, with an annual increase
of 20 per cent during the year 2013-14. The HFCs' market share was approximately 35 per cent of the
retail housing finance market. The Directions/Policies Circulars/ Guidelines issued by NHB for the
HFCs on issues pertaining to requirements of Net Owned Fund, Capital Adequacy Ratio, Loan to Value
Ratio, Assignment of Risk weights and Provisioning, Know Your Customer and Anti Money Laundering,
etc., have been intended to ensure sound growth of HFCs and development of housing finance sector on
sustainable lines. Some of the key highlights of HFCs would include the followingl
Number of registered HFCs was increased from 56 as on 31-03-2013 to 58 as on 31-03-2014.
Number of branches/offices of registered HFCs was increased from 2,063 as on 31-03-2013 to

` 2,510 as on 31-03-2014.
Total outstanding loan portfolio as on 31-03-2014 was ` 463,942 crore, with an annual growth
of 18.89%.
Total outstanding housing loan portfolio as on 31-03-2014 was ` 347,858 crore, with an annual
growth of 19.77%.
Total outstanding non-housing loan portfolio as on 31-03-2014 was ` 116,084 crore, with an
annual growth of 16.33%.
Share of outstanding housing loans to outstanding total loans was increased to 74.98% as on
31-03-2014 from 74.43% as on 31-03-2013.
Share of outstanding non-housing loans to outstanding total loans was marginally decreased to
25.02% as on 31-03-2014 from 25.57% as on 31-03-2013.
Total NNPAs as on 31-03-2014 were ` 2,524 crore with an increase of 43.90% over previous year
( ` 1,754 crore as on 31-03-2013).
Total Net Owned Funds as on 31-03-2014 were increased by 1.49%, i.e. from ` 51,027 crore as
on 31-03-2013 to ` 51,785 crore as on 31-03-2014.
Outstanding Borrowings of HFCs as on 31-03-2014 were ` 421,559 crore, with an annual
growth of 19.04%.
Outstanding Public Deposits as on 31-03-2014 were ` 51,981 crore, with an annual growth of
17.66%.
140
Chapter-5 Operations and Performance of Housing Finance Institutions
5.1
Number of Housing Finance Companies

5.1.1 As on 31-03-2014, 58 HFCs were granted the Certificate of Registration (CoR) under Section 29A
of the National Housing Bank Act, 1987. Of these, 40 HFCs were given the CoR without
permission to accept public deposits. Out of 58 HFCs, 50 were public limited companies and 8
were private limited companies. In 2013-14, Certificates of Registration have been granted to
companies namely Capital First Home Finance Private Limited and Viva Home Finance Limited.
Graph11: Classification of Registered Housing Finance Companies
Public Limited Companies

60
Private Limited Companies
50
40
30
20
10
0
31-03-2013
31-03-2012
31-03-2014
5.1.2 Branches/ Offices Network of the HFCs

HFCs branches/offices were increased from 2,063 as on 31-03-2013 to 2,510 as on 31-03-2014,
with an annual growth of about 22%.
Graph 12: State/ Union Territory-wise Branches/Offices of Registered HFCs
450
400
350
300
250
200
150
100
50
0
31-03-2013
141
31-03-2014
5.2
Financial Profile of HFCs

5.2.1 Financial year for the HFCs registered with NHB is from April 01 to March 31, and the data
provided under this Chapter was as on March 31, 2014.
Table 26: Trend in Key Financial Indicators of HFCs for the last three years
(Amount in ` crore)
Particulars
2012
Paid up Capital
2013
Growth
%
2014
Growth
%
5,403
5,541
2.55
6,014
8.54
Free Reserves
34,658
48,019
38.55
55,179
14.91
Net Owned Fund (NOF)
37,103
51,027
37.53
51,785
1.49
Public Deposits
35,476
44,179
24.53
51,981
17.66
Outstanding Housing Loans
2,22,225
2,90,427
30.69
3,47,858
19.77
Outstanding Total Loans
3,01,681
3,90,217
29.35
4,63,942
18.89
GNPA as Percentage of O/s Total

Loans
1.23
1.11
1.14
NNPA as Percentage of O/s Total

Loans
0.48
0.45
0.59
5.2.2 The total Net Owned Fund (NOF) of HFCs as at the end of March, 2013 were ` 51, 027 crore,
which increased to ` 51,785 crore as at the end of March, 2014, thereby shown a growth of 1.49
per cent from the preceding year. Public Deposits of HFCs grew by 18%, that is, from ` 44,179
crore at the end of March, 2013 to ` 51,981 crore at the end of March, 2014. Trend analysis on
outstanding resources data of HFCs revealed that HFCs raised about one third of resources from
banks through borrowings and subscription to debentures, and the debentures subscribed by
others constituted around one fourth. Although NHB's refinance support constituted around 4%
of HFCs outstanding resources, but played a crucial role in containing HFCs' cost of borrowings.
Graph 13: Trend in Outstanding Resources of HFCs for the last three years
Net Owned Fund

Public Deposits
Borrowings from NHB
Borrowings from Banks
Foreign Borrowings
Other Borrowings
Debentures subscribed by Banks
Debentures subscribed by Others
142

5.2.3 Housing loan outstanding with HFCs as at the end of March, 2013 were ` 290,427 crore, and it was
increased to ` 347,858 crore as at the end of March, 2014, thereby shown a growth of about 20 per
cent as on March 31, 2014. Share of loan of HFCs was the highest amongst all loan assets of HFCs
in three years i.e. 68,70 and 70 percent, respectively. The investment percentage to total assets
were the least in HFCs asset. Aggregate investments of HFCs stood at ` 34,228 crore as on March
31, 2014 as against ` 27,176 crore as on March 31, 2013, thereby registering an increase of 25.95
per cent.
Graph 14: Trend in OutstandingAssets of HFCs for the last three years
Housing Loans
Investments
Other Loans & Advances
5.3
Key Performance Indicators of HFC

5.3.1 Key financial parameters of Public and Private Ltd. shown that Public Limited HFCs were the
dominant player in the market.
Table 27: Trend in Performance of Public and Private Ltd. HFCs for the last three years
(Amount in ` crore)
2011 &12
Particulars
Paid up
Capital
Free Reserves
Net Owned
Fund (NOF)
Public
Deposits
Outstanding
Housing
Loans
Public
Ltd.
5,239
Private
Ltd.
164
34,620
2012 &13
Total
5,403
Public
Ltd.
5,367
Private
Ltd.
174
38
34,658
47,911
36,912
191
37,103
35,476
---
2,22,082
143
2013 &14
5,541
Public
Ltd.
5,879
Private
Ltd.
135
108
48,019
55,021
158
55,179
50,760
267
51,027
51,502
283
51,785
35,476
44,179
---
44,179
51,981
---
51,981
2,22,225
2,90,001
426
2,90,427
347,376
482
3,47,858
143
Total
Total
6,014
5.3.2 On the basis of Public Deposit accepting and non-accepting: As on March 31, 2014, 18 HFCs
had the Certificate of Registration with permission to accept public deposits. The key financial
parameters of HFCs for the past three years were provided in the following table on the basis of
classification into public deposit accepting and non-public deposit accepting HFCs.
Table 28: Trend in Performance of Public Deposit accepting HFCs with Non-accepting
HFCs for the last three years
(Amount in ` crore)
Non-Deposit
accepting
HFCs
Deposit
accepting
HFCs
Non-Deposit
accepting
HFCs
As on 31-03-2014
Deposit
accepting
HFCs
Paid up
Capital
Free
Reserves
Net Owned
Fund (NOF)
Public
Deposits
Outstanding
Housing
Loans
As on 31-03-2013
Non-Deposit
accepting
HFCs
As on 31-03-2012
Deposit
accepting
HFCs
Particulars
4,324
1,079
5,403
4,072
1,469
5,541
4,138
1,876
6,014
33,075
1,583
34,658
42,192
5,827
48,019
48,239
6,940
55,179
34,545
2,558
37,103
44,056
6,971
51,027
43,772
8,013
51,785
35,476
---
35,476
44,179
---
44,179
44,179
---
51,981
2,10,640
11,585
2,22,225
2,62,821
27,606
2,90,427
3,11,111
36,747
3,47,858
Total
Total
Total
5.3.3 Commercial Banks and Multi-State Co-operative Bank Sponsored HFCs: As on March 31,
2014, there were five HFCs sponsored by Commercial Banks and one HFC sponsored by a multistate co-operative Bank, the details of which are given below :
l
l
l
l
l
l
Can Fin Homes Ltd., sponsored by Canara Bank

Cent Bank Home Finance Ltd., sponsored by Central Bank of India
ICICI Home Finance Company Ltd., sponsored by ICICI Bank Ltd.
Ind Bank Housing Ltd., sponsored by Indian Bank
PNB Housing Finance Ltd., sponsored by Punjab National Bank
REPCO Home Finance Ltd., sponsored by REPCO Bank, which is a multi-state
co-operative Bank.
Key financial parameters of HFCs classified on the basis of Commercial Banks and MultiState Co-operative Banks sponsored HFCs, and Other HFCs shows the dominant position of
other HFCs, compared to sponsored HFCs.
Table 29: Trend in Performance of Sponsored HFCs with other HFCs for the last three years
( Amount in ` crore)
Particulars
Paid up
Capital
Free
Reserves
Net Owned
Fund (NOF)
Public
Deposits
Outstanding
Housing
Loans
As on 31-03-2012
As on 31-03-2013
As on 31-03-2014
Other
Total Sponsored
Other
Total
Sponsored
Other
Total
HFCs
HFCs
HFCs
HFCs
HFCs
4,177
5,403
1,262
4,279
5,541
1,282
4,732
6,014
Sponsored
HFCs
1,226
1,311
33,347
34,658
1,931
46,088
48,019
2,465
52,714
55,179
2,331
34,772
37,103
3,005
48,022
51,027
3,536
48,249
51,785
1,248
34,228
35,476
1,718
42,461
44,179
2,296
49,685
51,981
12,318
2,09,907
2,22,225
15,860
2,74,567
2,90,427
20,854
3,27,004
3,47,858
144
5.4
Borrowing Profile of HFCs

Paid- up capital of the HFCs (including the preference share capital which is compulsorily convertible
into equity) was increased from ` 5,541 crore as on 31-03-2013 to ` 6,014 crore as on 31-03-2014, i.e.
growth of 8.54 per cent per annum. However, there was an increase of only 1.54 per cent per annum in the
Net Owned Funds of the HFCs i.e. from ` 51,028 crore as on 31-03-2013 to ` 51,785 crore as on 31-032014. HFCs dependency was observed on loans from banks and financial institutions and debentures,
besides their owned funds. Borrowings through bonds and debentures, inter-corporate deposits (ICDs),
commercial papers, sub-ordinate debts and public deposits were other sources of funds for HFCs.
Table 30: Trend in Composition of Borrowings of HFCs for the last three years
(Amount in ` crore)
Particulars
National Housing Bank

Foreign Government, Foreign
Authority and Foreign Citizen or
Person
Banks
Debentures secured by mortgage of
immovable properties or convertible
debentures
i. Of the above,
ii. debentures subscribed by
banks
iii. debentures subscribed by
others
iv. Others
v.
Public Deposits
2011 -12
2012 -13
2013 -14
Growth
over
As on
As on
As on Growth over
pervious
31-03-2012 31-03-2013
31-03-2014 pervious
year
year
10,641
15,863
49%
19,376
22%
1,801
1,059
-41%
3,314
213%
100,663
104,236
4%
128,407
23%
96,032
141,257
47%
169,015
20%
22,821
35,526
56%
40,795
15%
73,210
105,731
44%
128,220
21%
32,183
47,553
48%
49,466
4%
35,476
44,179
25%
51,981
18%
The outstanding borrowings of HFCs excluding public deposits were increased by 19.23 per cent, i.e.
from ` 309,967 crore as on 31-03-2013 to ` 369,578 crore as on 31-03-2014. Borrowings from the
banking system stood at ` 128,407 crore as on 31-03-2014 as against ` 104,236 crore as on 31-03-2013.
Other borrowings were increased from 205,731 crore as on 31-03-2013 to ` 241,171 crore as on 31-032014, thereby registering a growth of 17.23 per cent. The outstanding public deposits with the HFCs
registered an increase of 17.66 per cent i.e. from ` 44,179 crore as on 31-03-2013 to ` 51,981 crore as on
31-03-2014.
5.5
Public Deposits with HFCs

Outstanding public deposits with HFCs showed an increasing trend during the year 2013-14. As on 3103-2014, public deposits over ` 1,00,000 accounted for maximum with a share of 85.48 per cent of the
total public deposits. The trend in size-wise outstanding public deposits at the end of last three years is
shown in the Chart below. It was observed that major HFCs viz. Housing Development Finance
Corporation Ltd., Housing & Urban Development Corporation Ltd., Dewan Housing Finance
Corporation Ltd., PNB Housing Finance Ltd., Gruh Finance Ltd, Sundaram BNP Paribas Home Finance
Ltd., LIC Housing Finance Ltd., etc. mobilized significant amount of public deposits during the year
2013-14.
145
Graph 15 : Trend in Size-wise Public Deposits of HFCs for the last three years
Rs. 5,001 to Rs. 10,000
Rs. 50,001 to Rs. 100,000
Rs. 10,001 to Rs. 25,000

Over Rs. 100,000
(Amount in ` crore)
Upto Rs. 5000

Rs. 25,001 to Rs. 50,000
5.5.1 Interest rate-wise Public Deposits of HFCs:

As on 31-03-2014, 84.44 per cent of the total public deposits held by the HFCs were in the interest
rate slab of 9 to 11 per cent per annum. HFCs had 10.42 per cent of public deposits in the interest
rate slab of 6 to 9 per cent per annum, which showed the decline over previous year. The slab of
interest rate of 13 per cent and above had the least share of public deposits during the last three
years.
Graph 16: Trend in Interest rate-wise Public Deposits of HFCs for the last three years
Free of interest
(Amount in ` crore)
Below 6%
6% or more but less than 9%
9% or more but less than 11%
11% or more but less than 12.5%
At 12.5%
More than 12.5% but less than 14%
More than 14%
5.5.2 Maturity-wise Public Deposits of HFCs:

Analysis of maturity-wise classification of public deposits in the last three years shows that the
majority of the public depositors' preference was between 24 months and 48 months. However, the
share of public deposits in this category has shown a decreasing trend as on March 31, 2014.
146

Graph 17 : Trend in Maturity-wise Public Deposits of HFCs for the last three years
More than 84 months
84 months
(Amount in ` crore)
More than 60 months but less than

84 months
60 months
48 months or more but less than 60
months
months
months
Less than 12 months
Repayable on demand or on notice
5.6
Asset Profile of HFCs

Asset profile of HFCs mainly comprises of housing loans, other loans and investments, and the
outstanding amount at the end of March 31, 2014 was ` 4,98,170 crore. In 2013-14, housing loans
contributed around 70 per cent of the total assets portfolio of HFCs, with an annual growth of about 19%
as on March 31, 2014. Other Loans and Advances comes next to housing loans in HFCs assets profile
with a share of about 23%, and the investments share was on a increasing trend, and had only about 7% of
the total assets of HFCs in 2013-14.
5.6.1 Outstanding Loans andAdvances, and Investments of HFCs
Table 31: Trend in Outstanding Loans & Advances, and Investments of HFCs for the last
three years
(Amount in ` crore)
Particulars/As on March 31
Growth %
2012
2013
2,22,225
2,90,427
30.69
3,47,858
19.77
Other Loans & Advances
79,456
99,790
25.59
1,16,084
16.33
Investments
26,397
27,176
2.95
34,228
25.95
3,28,078
4,17,393
27.22
4,98,170
19.35
Housing Loans
Total
2014
Growth %
HFCs' other loans and advances outstanding stood at ` 116,084 crore as on 31-03-2014, as
compared to ` 99,790 crore as on 31-03-2013, with a growth rate of 16.33 per cent per annum. The
outstanding ratio between housing loans and other loans & advances was 3:1.
Aggregate investments of HFCs stood at ` 34,228 crore as on 31-03-2014, compared to ` 27,176
crore as on 31-03-2013, with an increase of 25.95 per cent per annum.
147
5.6.2 Housing Loans of HFCs

Outstanding housing loans of all registered HFCs was ` 347,858 crore as on 31-03-2014, and saw
a growth of 20 per cent per annum, compared to ` 290,427 crore as on 31-03-2013. The percentage
of outstanding housing loans to total loans was at 73.66% per cent and 74.43 per cent as on March
31, 2012 and March 31, 2013 respectively, which marginally increased and maintained at 74.98
per cent, as on March 31, 2014
Table 32: Comparison of Housing Loans with Total Loans of HFCs as on March 31
(Amount in ` crore)
Particulars/As on March 31
2012
2013
Growth %
2014
Growth %
Outstanding Housing Loans
2,22,225
2,90,427
30.69
3,47,858
19.77
Outstanding Total Loans
3,01,681
3,90,218
25.59
4,63,942
18.89
73.66%
74.43%
--
74.98%
--
Housing Loans to Total Loans
5.6.3 Maturity pattern of Housing Loans of HFCs

Analyzing the trend on the maturity pattern of housing loans outstanding to Individuals with
HFCs, it was observed that around 97% of these housing loans were had the maturity of above 7
years. This indicates that the preference of majority of HFCs individual housing loan customers'
was for housing loan of a long tenure, rather than short or medium tenure.
(Amount in ` crore)
Graph 18: Trend in Maturity-pattern of Outstanding Housing Loans to Individuals by

HFCs
300000.00
250000.00
200000.00
150000.00
100000.00
50000.00
0.00
Up to 1 year
1 to 3 years
> 3 to 5 years
> 5 to 7 years
Above 7 years
Individual Housing Loan Tenor
5.7
Disbursements of Housing Loans by HFCs, based on type of Borrowers

The disbursements on housing loans by HFCs had a growth rate of about 21% in 2013-14 over 2012-13.
Borrowers' type-wise dissection of disbursement of housing loans in 2013-14, further revealed that
around 78% of their housing loans were to individuals, 16% to builders and 6% to corporate bodies and
others. This indicates that HFCs main service concentration of housing loan was individuals.
148

Graph 19: Trend in Disbursements of Housing Loans by HFCs for the last three years, based on
Category of the Borrowers.
(Amount in ` crore)
Housing Loans to Individuals
Housing Loans to Builders
Housing Loans to Corporate Bodies and Others
5.7.1 Trend in disbursements of housing loans to individuals by HFCs for the last three years,
based on purpose of utilization.
Analysis of purpose-wise HFCs disbursements of housing loans given to individuals revealed that
about 74% of the loans disbursed were for acquisition/ construction of new houses, 2% for upgradation including major repairs, and the balance 24% for old/existing houses (resale). This
showed that new assets creation were the main activity of the borrowers from the housing loans
disbursed by HFCs.
Graph 20: Trend in Disbursements of Housing Loans to Individuals by HFCs for the last
three years, based on purpose of utilization.
Category-wise Disbursement Trend on Housing Loans by HFCs
80000
Upto Rs. 2 lakh

>Rs. 2 lakh and upto Rs. 5 lakh
70000

60000
Amount in ` crore

>Rs. 25 lakh
50000
40000
30000
20000
10000
0
New Houses Upgradation Existing Houses
2011-2012
2012-2013
149
2013-2014
In 2013-14, HFCs disbursed ` 1,04,057 crore to 11,02,712 loan accounts for acquisition/
construction of new houses, up-gradation (including major repairs), and purchase of old/existing
houses (resale). The segregated and consolidated details are captured in the tables .
Table 33: Trend in Disbursements of Housing Loans of HFCs to individuals for the last three
yearsAcquisition/Construction of New Houses
(Amount in ` crore)
Particulars
2011-12
2012-13
Growth %
2013-14
Growth %
248
369
48.79
566
53.39
Above ` 2,00,000 and upto ` 500,000
1,211
1,267
4.62
1,385
9.31
Above ` 5,00,000 and upto ` 10,00,000
7,046
9,800
39.09
7,199
-26.54
Above ` 10,00,000 and upto ` 15,00,000
6,681
8,196
22.68
13,240
61.54
Above ` 15,00,000 and upto ` 25,00,000
12,509
16,148
29.09
17,031
5.47
Above ` 25,00,000
Total (1)
20,971
31,291
49.21
37,281
19.14
48,666
67,072
37.82
76,702
14.36
Upto ` 2,00,000
Table 34: Trend in Disbursements of Housing Loans by HFCs to Individuals for the last
three years Upgradation (including major repairs)
(Amount in ` crore)
Particulars
2011-12
Upto ` 2,00,000
2012-13
Growth %
2013-14
Growth %
96
114
18.75
57
- 50.00
Above ` 2,00,000 and upto ` 500,000
443
449
1.35
490
9.13
Above ` 5,00,000 and upto ` 10,00,000
694
872
25.65
919
5.39
Above ` 10,00,000 and upto ` 15,00,000
294
366
24.49
467
27.60
Above ` 15,00,000 and upto ` 25,00,000
179
248
38.55
317
27.82
89
136
52.81
152
11.76
1,795
2,185
21.73
2,402
9.93
Above ` 25,00,000
Total (2)
Table 35: Trend in Disbursements of Housing Loans by HFCs to Individuals for the last
three yearsAcquisition of Old/Existing Houses (Resale)
(Amount in ` crore)
Particulars
2011-12 2012-13
Upto `2,00,000
Growth %
2013-14
Growth %
18
21
16.67
28
31.08
259
311
20.08
291
-6.51
Above ` 5,00,000 and upto ` 10,00,000
1,843
1,976
7.22
1,720
-12.95
Above ` 10,00,000 and upto ` 15,00,000
2,757
3,097
12.33
2,919
-5.76
Above ` 15,00,000 and upto ` 25,00,000
4,595
5,641
22.76
5,948
5.44
Above ` 25,00,000
8,288
12,285
48.23
14,048
14.35
17,760
23,331
31.37
24,953
6.95
Above ` 2,00,000 and upto ` 500,000
Total (3)
150

Table 36: Trend in Total Disbursements of Housing Loans by HFCs to Individuals for the last three
years
(Amount in ` crore)
Particulars
2011-12 2012-13
Growth %
2013-14
Growth %
362
505
39.50
651
28.84
Above ` 2,00,000 and upto ` 500,000
1,912
2,027
6.01
2,166
6.87
Above ` 5,00,000 and upto ` 10,00,000
9,584
12,649
31.98
9,838
-22.23
Above ` 10,00,000 and upto ` 15,00,000
9,732
11,659
19.80
16,625
42.60
Above ` 15,00,000 and upto ` 25,00,000
17,283
22,037
27.51
23,295
5.71
Above ` 25,00,000
29,348
43,712
48.94
51,481
17.77
Total (4) = (1) + (2) + (3)
68,221
92,589
35.72
1,04,057
12.39
Upto `2,00,000
Out of total housing loan disbursements of ` 1,04,057 crore to individuals in 2013-14, ` 2,817 crore was
disbursed towards housing loan upto `5 lakh, which contributed to 2.71 per cent of the total. From the
compilation of submitted information, it was observed that out of ` 2,817 crore disbursed in the category
of slab of housing loan upto ` 5 lakh, ` 10 crore, ` 207 crore, and ` 2,600 crore were disbursed to the
category of borrowers having income of upto ` 5,000, ` 5,001 to ` 10,000 and more than ` 10,000,
respectively.
Table 37: Disbursements of Housing Loans by HFCs to Individuals in 2013-14, as per Income
Category
(Amount in ` crore)
Size of Housing
Loan
Income < `
5,000 p.m.
No.
Income ` 5,001 to
` 10,000 p.m.
Amt
No.
Income > ` 10,000

p.m.
Amt
No.
Amt
Total
No.
Amt
Upto ` 3 lakh
1196
22662
179
63493
904
87351
1092
> ` 3 lakh and

upto ` 5 lakh
116
1034
28
50898
1696
52048
1725
1312
10
23696
207
114391
2600
139399
2817
Total
NHB has also compiled the State/ UT-wise data on housing loans to Individuals and Builders, on
disbursement and outstanding, and also housing loan disbursement in rural and urban areas,
from 2011-12.
151
Table 38: Trend in HFCs Housing Loan disbursements in different States/ UT as per Urban and Rural
Categories.
(Amount in ` crore)
Particulars
State/UT
2012-13
2013-14
% Growth in
Total
Urban
Rural
Total
Urban
Rural
7,226
1,014
8,240
7,502
1,024
8,526
3.47
0.68
0.68
0.78
750.00
Assam
296
303
326
328
8.25
Bihar
188
192
208
213
10.94
Chandigarh
382
19
401
340
343
-14.46
Chhattisgarh
559
59
619
643
56
699
12.92
Dadra and Nagar Haveli
58
0.38
58
44
0.4
44
-23.45
Daman and Diu
20
0.08
20
20
0.47
20
2.35
4,074
110
4,184
3,359
192
3,551
-15.13
128
48
176
116
47
163
-7.39
Gujarat
3,713
887
4,599
4,371
1,132
5,503
19.66
Haryana
4,484
349
4,833
4,651
347
4,998
3.41
Himachal Pradesh
26
28
34
37
32.14
Jammu and Kashmir
20
0.09
20
23
23
15.00
Jharkhand
301
13
314
351
20
371
18.15
Karnataka
6,724
3,153
9,876
7,454
3,965
11,419
15.62
Kerala
1,842
785
2,627
2,046
894
2,940
11.91
2,251
281
2,532
2,652
342
2,994
18.25
19,790
4,227
24,017
24,672
4,634
29,306
22.02
0.79
33
37
311.11
Mizoram
0.29
17
24
242.86
Nagaland
0.05
0.05
1900.00
Odisha
511
18
529
557
29
586
10.78
Puducherry
144
22
166
157
20
177
6.63
Punjab
1,366
185
1,550
1,501
159
1,660
7.10
Rajasthan
2,493
325
2,819
3,017
470
3,487
23.70
51
0.91
52
62
62
19.23
11,501
1,904
13,405
11,694
2,100
13,794
2.90
Andhra Pradesh
Andaman and Nicobar
Islands
Arunachal Pradesh
Delhi
Goa
Lakshadweep
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Sikkim
Tamil Nadu
Tripura
Total
8,148
304
8,452
9,186
475
9,661
14.30
Uttarakhand
630
67
697
779
98
877
25.82
West Bengal
1,802
60
1,862
2,146
60
2,206
18.47
78,729
13,859
92,589
87,957
16,100
104,057
12.39
Uttar Pradesh
Total
152

Picture 2A Trend in HFCs Disbursements of Housing Loans to Individuals
Trend : Karnataka has improved its position over previous year and moved from yellow to blue category.
Picture 3A Trend in HFCs Outstanding Housing Loans to Individuals
Trend : Jharkhand has improved its position over previous year and moved from green to yellow category.
153
Picture 2B - Trend in HFCs Disbursements of Housing Loans to Builders
Trend : Haryana, Maharashtra and Tamil Nadu have improved their positions over previous year, Haryana &
Tamil Nadu have moved from green to yellow category, while Maharashtra has moved from yellow to blue
category.Assam has moved down from green to white category.
Picture 3B Trend in HFCs Outstanding Housing Loans to Builders
Trend : Tamil Nadu has improved its position over previous year, and has moved from green to yellow category
while Bihar has moved down from green to white category.
154

Picture 4 Trend in HFCs Disbursements of Housing Loans Acquisition/ Construction of New Houses to
Individuals
Trend: All the states and Union territories have maintained consistency.
155
CHAPTER 6
Institutional performance viz-a-viz
Housing Finance
6.1
Categories of Institutions Providing Housing Finance

The housing finance industry today comprises of banks, HFCs and cooperative institutions. NHB was set
up at a time when housing finance as a product was in its infancy, and the economy itself was on the
threshold of change. From its early years, amid rapidly changing market dynamics, attendant on
liberalization and deregulation, NHB had to steer a nascent sector through the transition phase to a
competitive, dynamic and market oriented phase. The policy and regulatory framework of NHB has
consistently encouraged the industry to adopt market based solutions with due regard to affordability and
stability. The quality of assets in the mortgage industry is among the best in the economy.
As of today, the need of long term finance for housing in the country is catered to by the following types of
institutions:
a.
Financial Institutions
b.
Scheduled Commercial Banks including Regional Rural Banks
c.
Scheduled Cooperative Banks (Scheduled State/District/ Urban Cooperative Banks)
d.
Agriculture and Rural Development Banks
e.
f.
State LevelApex Co-operative Housing Finance Societies
g.
NBFCs/MFIs/SHGs have also been lending for housing, though in a small way.
The Indian Mortgage Market is expected to show rapid growth in the coming years. Banks share of the
housing loans outstanding in the formal housing market accounted for nearly 61%. The share of Banks
can be attributed to extensive network and broad customer base, access to stable low-cost funds and other
regulatory mandates. However, the share of growth of HFCs can be one indicative of the strength of their
focused approach, targeting of special customer segments, relatively better customer service, etc.
6.2
Scheduled Commercial Banks and their Performance in Housing Finance

As on March 31, 2014, housing loans outstanding of SCBs were `5,40,800 crore, including priority
sector lending.17 Housing loans falling under priority sector were `3, 03,400 crore. Housing loans
constituted 9.56 per cent of the total advances of SCBs in the year 2013-14. Housing loans outstanding of
the SCBs increased by 18.41 per cent as on March 31, 2014, when compared to 14.59 per cent as on
March 31, 2013.
17
Sectoral Deployment of bank Credit-March 2014

156
Chapter-6 Institutional Performance viz-a-viz Housing Finance

Table 39: Trend in Outstanding Housing Loans of SCBs for the last two years
Details
Gross Bank Credit

Housing Loans
(Priority & Non Priority)
Out of which Housing Loans
(Priority)
(Amount in ` crore)
March, 2014
Year on Year
Growth (%)
49,64,177
4,56,665
56,57,231
5,40,819
13.96
18.43
2,67,203
3,03,400
13.55
March, 2013
6.2.1 Credit towards Rural and Urban Housing

SCBs through their vast network of branches make disbursements of housing loans to borrowers.
However, as reflected below, they still have small reach in rural and semi urban areas where
majority of the population resides. Contrarily, SCBs share of metropolitans in the total bank credit
is almost 50 per cent, showing the concentration and servicing area preference by SCBs for
housing loans. The factors attributing to low credit distribution of housing credit in rural and semi
urban areas may be high transaction cost, lack of proper titles, lack of collateral, large unorganized
sector and low income households.
Table 40:Area-wise Outstanding Housing Loans of SCBs, as on March 31, 2013

(Amount in ` crore)
Area
Rural Area
Outstanding
2,53,538
Percentage to total
6.69
6,03,634
10,19,677
19,10,585
37,87,434
15.94
26.92
50.45
100.00
Semi Urban Area

Urban Area
Metropolitan Areas
Total
Source : Banking and Statistical Returns by RBI as on March 31,2013 Published on October 28, 2014
6.2.2 Classification of Housing Loans as per Interest Rates

Housing loans are generally given at floating rate and have direct linkage to the Base Rate of the
particular Bank. The loans are given for longer gestation period. As may be observed from the
table below, it is evident that the SCBs were extending maximum housing finance in the range of
9-13 per cent interest rate per annum. Some Banks extend housing loans at lower interest rates
under special schemes of refinance from NHB and other mandatory lending such as priority
sector. As shown below in the table, 93 per cent of housing loans were disbursed at a rate of interest
lower than 13 per cent.
157
Table 41: Classification of outstanding Housing Loans of SCBs, as per Rate of Interest
Rate of Interest (Percentage)
Loan outstanding of SCBs

(Amount in ` crore)
Less than 6
Percentage of total
3045.79
0.66
6 % to less than 9%
28,937.48
6.23
9 % to less than 10 %
49,216.26
10.59
1,94,452.80
41.84
1,01,275.62
21.79
12% to less than 13 %
53,853.06
11.59
13 % less than 14 %
16,498.76
3.55
8,495.45
1.83
5,141.04
1.11
2,329.89
0.50
840.95
0.18
549.87
0.12
74.23
0.02
4,64,711.20
100.00
20 % and above
Total
Source : Banking and Statistical Returns by RBI as on March 31,2013 Published on October 28, 2014
6.2.3 Details of Housing Loans by Public Sector Banks

NHB is collecting the slab-wise Housing Loan data from Public Sector Banks on quarterly and
yearly basis in five different slabs namely up to ` 2 lakh, above ` 2 lakh and up to ` 5 lakh, above
` 5 lakh and up to ` 10 lakh, Above ` 10 lakh and up to ` 25 lakh and above ` 25 lakh. The data so
captured consists of attributes like total housing loans disbursed during the quarter, housing loans
outstanding as on the last day of the quarter and percent of NPAin respect of the slab-wise loans.
As per the data available from 26 PSBs, the total outstanding of housing loans was stood at
` 3,75,090 crore, as on March 31, 2014, and the total disbursements of housing loans during the
year 2013-14 by these 26 PSBs was ` 98,787 crore.
Table 42: Comparison of PSBs Housing Loans for the last two years
(Amount in ` crore)
Details
2012
Total Disbursement of
Housing Loans
Total Outstanding of
Housing Loans
158
2013
Growth
(%)
71,857
98,787
37.48
3,11,982
3,75,090
20.21

Table 43: Trend in Slab-wise Housing Loans of PSBs for the last two years
(Amount in ` crore)
FY 2012-13
Slab- wise Housing

Loan ( `)
Disbursed
O/S
FY 2013-14
NPA (%)
Disbursed
O/S
NPA (%)
Upto 2 Lakh
2,957
6,165
11.52
1,883
5,801
10.57
Above 2-5 Lakh
4,028
36,659
4.48
3,768
33,991
3.34
Above 5-10 Lakh
11,281
69,436
3.01
12,464
74,866
1.79
Above 10-25 Lakh
29,912
1,19,362
1.41
37,680
1,45,694
0.95
Above 25 Lakh
23,678
80,359
1.01
42,993
1,14,737
0.62
Total
71,857
3,11,982
2.35
98,787
3,75,090
1.38
It may be observed from the above table that the loan volumes in above ` 10 lakh to `25 lakh and above
` 25 lakh constituted major portion of the total housing loans disbursed. Also, in the total outstanding
loans the slab of above ` 10 lakh to `25 lakh constituted the maximum. This slab also shows low level of
NPAs'.
Percentage to total
Graph 21: Trend in Outstanding Housing Loans of PSBs
6.3
Upto 2 Lakh
2-5 Lakh
5-10 Lakh
10-25 Lakh
Above 25 Lakh
FY 2012-13
1.98%
11.75%
22.26%
38.26%
25.76%
FY 2013-14 **
1.55%
9.06%
19.96%
38.84%
30.59%
The National Co-operative Housing Federation of India18

The National Co-operative Housing Federation of India (NCHF) is the nationwide organization of
the Indian Cooperative Housing Movement. The basic thrust of its formation was to have an
organization at the national level to assume the responsibility of promoting, developing and
coordinating the activities of housing cooperatives in the country.
18
National Cooperative Housing Federation

159
The cooperative housing structure consists of primary housing cooperatives at the grass root Level
and Apex Cooperative Housing Federations. The National Cooperative Housing Federation of
India (NCHF) is the nationwide organization of the Indian Cooperative Housing Movement. The
basic thrust of its formation was to have an organization at the national level to assume the
Responsibility of promoting, developing and coordinating the activities of housing cooperatives
in the country. These Federations have so far disbursed `12128.62crore to primary housing cooperatives for construction of dwelling units for their members.
Table 44: Trend in Borrowings, Sanctions and Disbursements of Apex Cooperative Housing
Federations (Cumulative) for the last three years
(Amount in ` crore)
Type
2011-12
2012-13
2013-14
Amount Borrowed
10,555.28
10,689.16
10,755.40
Loan Sanctioned
12,063.36
12,430.43
12,574.47
Loan Disbursed
11,571.71
11,971.21
12,128.62
Table 45: Trend in Housing Loan Disbursed and Units Constructed by ACHFs: (State Wise)
for the last three y ears
(Amount in ` crore)
State
2011-12
2012-13
2013-14
Units
Units
Units
Constructed/ Amount Constructed/ Amount Constructed/
Financed
Financed
Financed
Andhra Pradesh
Assam
Bihar
Chandigarh
Delhi
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Odisha
Pondicherry
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
Total
595
6
800
769
31
n.a.
n.a.
n.a.
447
6,255
n.a.
2,527
4
10
152
11,596
44.44
0.07
33.00
101.57
3.15
071
0.81
5.18
61.63
183.93
2.90
48.02
0.08
3.59
8.06
467.44
160
447
350
38
n.a.
n.a.
n.a.
291
7,261
11
834
9,262
65.09
104.17
4.77
4.40
1.43
32.12
9.65
128.97
3.23
45.66
399.50
Amount
n.a.
815
-
n.a.
n.a.
-
n.a.
n.a.
26
840
n.a.
n.a.
139
18,940
n.a.
n.a.
n.a.
43
n.a.
n.a.
67.34
2.63
1.28
1.18
n.a.
1495
66.61
n.a.
n.a.
n.a.
3.30
n.a.
4
n.a.
20,807
0.13
n.a.
157.41
6.4
Microfinance Institutions
Other than Scheduled Commercial Banks, Housing Finance Companies, and Cooperative Institutions,
Microfinance Institutions or Non-Governmental Organizations have made a dent through local
participative approach in catering to the housing finance needs of the low income segments of the society.
The MFIs work on the model of SHGs linked with Banks. NHB has recognized the Housing Micro
Finance Institutions as an important channel for delivering housing finance to the unserved section of
society and accordingly developed a suitable Housing Microfinance Scheme for them. NHB in its
endeavour to provide housing to the unserved segments of the society pioneered a Housing Micro
Finance (HMF) Scheme in 2004. Cumulatively, till June 30, 2014, NHB has sanctioned loan amount of
` 101.68 crore to 32 microfinance institutions, for financing 40,210 urban and rural housing/sanitation
units. The Housing Microfinance Programme of NHB is spread across 11 states which include Andhra
Pradesh, Karnataka, Tamil Nadu, Maharashtra, Orissa, Gujarat, Kerala, Assam, Uttar Pradesh, West
Bengal and Madhya Pradesh. The beneficiaries include farmers, housemaids, petty traders, artisans,
dairy workers and other low income segments. More than 90 percent of the beneficiaries are women.
The approximate income levels of the beneficiaries range between ` 5000/- to ` 7000/- per month.
Besides, Bank has also opened a specialized window for Water and Sanitation programmes being taken
up by MFIs for their members of Self Help Groups. These programmes form an integral part of the HMF
programme of the Bank.
161
CHAPTER 7
Area of Focus
Sustainable Energy Efficient Housing
7.1
Introduction
Globally, the building sector accounts for more electricity use than any other sector i.e., 42 per cent19.
With increasing urbanization, the number and size of buildings in urban areas will increase, resulting in
an increased demand for electricity and other forms of energy commonly used in buildings.
Currently, India is experiencing an unprecedented demographic growth along with a steady economic
growth. Cities contribute significantly to the growth of any country's economy. Indian cities contribute
about 60% to the country's gross domestic product (GDP), and by 2030, this percentage would increase
to 70. As per 2011 Census, about 31.16% (377 million) of India's population were residing in urban
centers. This percentage is expected to further increase to 40% by 2030. According to International
Energy Agency (IEA), due to the swift urban sprawl and transformation of cities into economic hubs,
India will see maximum growth in energy consumption till 203520. It will be even more than China and
over 6 times more than United States and 5 times more than Russia. Though the growth rate will be
highest, the overall energy consumption will still be much lower as compared to United States and China.
The estimated electricity consumption in India increased from 4,11,887 GWh during 2005-06 to
8,52,900 GWh during 2012-13, showing a CAGR of 9.53%. The increase in electricity consumption is
8.62% from 2011-12 (7,85,193 GWh) to 2012-13 (8,52,900 GWh)21. Of the total consumption of
electricity in 2012-13, industry sector accounted for the largest share (44.87%), followed by domestic
(21.79%), agriculture (17.95%) and commercial sectors (8.33%). Per-capita Energy Consumption
(PEC) (the ratio of the estimate of total energy consumption during the year to the estimated mid-year
population of that year) increased from 3,497.59 KWh in 2005-06 to 6748.61 KWh in 2012-13, a CAGR
of 8.56%. The annual increase in PEC for 2012-13 over 2011-12 was 8.76%.
Graph 22: Trends in Consumption of Electricity* in India GWh
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
19
United Nations Industrial Development Organization (UNIDO)report on Energy efficiency in buildings

EIA Annual Energy Outlook 2013
21
Energy Statistics 2014, released by MOSPI, GoI
20
162
3
-1
12
2
20
20
11
-1
20
10
-1
10
20
09
-
09
20
08
-
-0
8
07
07
20
20
06
-
05
-0
6
01
20
20
00
-
1
-9
19
95
-9
90
-8
6
19
85
19
19
80
-8
1
-7
6
75
19
19
70
-
71
Chapter-7 Area of Focus: Sustainable Energy Efficient Housing

Graph 23 : Sector-wise Consumption of Electricity (Utilities) during 2012-13
Traction &
Railways
Commercial
Domestic
Agriculture
Industry
7.2
Energy Consumption in Residential Buildings

Building construction and its facility maintenance services consume a significant energy depending
upon its geographic location, design, type of construction and materials used and other facilities
provided. This is primarily because energy-intensive solutions are not sought while constructing a
building and meeting its demands for cooling, ventilation, and lighting and at times for heating in earlier
days. In India, the vast differences - in residential habits of rural and urban, climatic zones, income
groups requirements, construction practices, availability of variety of building materials etc. have led to
different housing patterns, which influence energy consumption considerably. Particularly, urban
housing and commercial complexes consume very high energy due to provision of comforts such as
air-conditioners, lifts / escalators, pumping etc. Sustainable building utilizes environmentally conscious
design techniques in order to reduce the negative environmental impact of buildings and infrastructure.
Enhancing efficiency and moderation in the use of energy is an important aspect of sustainability. The
estimated consumption of electricity by residential building is shown in the graph below22.
In Billion Sq.m.
Grap 24 : Future trend of building sector in India
70000
60000
50000
40000
30000
20000
10000
0
Residential
Commercial &
Office
2005
22
Hospitality
2030
Report on Constructing change: Accelerating energy efficiency in India's buildings market'

163
Retail
It is estimated that the total constructed built-up area would increase from 8 billion square meters in 2005
23
to 41 billion square meters in 2030 (about 5-fold increase) . Out of this total estimated built-up area by
2030, only 30% has been constructed. This situation is significantly different from the developed
countries, where bulk of the buildings is already constructed. This provides both challenges and
opportunities to building sector stakeholders to develop this building stock appropriately. Energy
management practices should be encouraged in the planning of buildings and the city form. Buildings
and city forms that are energy efficient and use sustainable energies like solar and wind energies should
be considered. There are fragments of evidences in India of settlements using solar power, water
recycling techniques and waste management practices. But in general, the environment friendly
techniques are yet to be practiced in urban areas, especially in large cities where the differences would be
felt. The environmental sustainability of housing is concerned with the impacts of housing on the
environment and climate change, as well as the impacts of the environment on housing itself.
As per the report of the Central Electricity Authority (CEA), the residential sector consumes
approximately 22% of the total electricity generated in India, which is about three times more than that of
the commercial buildings. One of the reasons for this is that the built-up area of residential buildings is
about seven times more than that of commercial buildings. The energy use intensity of the residential
buildings is expected to grow because of the increase in air-conditioned area, more access to electricity,
and the increase in ownership and usage of appliances by the tenants.
7.3
Towards achieving energy efficiency

Several government and private programs may exist to advance building efficiency in India. Current
Government policies, building rating systems and active stakeholders provide a foundation for
accelerating efficiency. Yet, as India's real estate market continues to grow, the current policy framework
needs to be further developed and implemented by all efficient stakeholders.
The implementation of energy efficiency measures and energy codes in buildings can help to ensure that
new buildings use energy efficiently, and this can reduce building energy use by 50% or more compared
to buildings designed without energy efficiency measures24. The implementation of energy efficiency
measures into residential buildings cannot only help consumers save significant costs on their energy
consumption but also contribute towards environmental preservation and sustainability. Energy
efficiency is the fastest, cleanest, and cheapest way to meet energy needs - India alone could save $42
billion each year by largely improving energy efficiency in buildings25. According to NRDC (2011), if
developers across India Implemented standard energy efficiency measures in new construction and
major retrofits, the country could avoid the need for 2988 MW of generation capacity.
There is wide support for the adoption of energy efficient measures in buildings in India both at the
Central and State Government level, but, as yet, little has been done by way of mandating legal
requirements to that effect. In certain States, Governments are encouraging green buildings but not so far
with any mandatory standards except for large projects. The Government of India has introduced the
necessary standards, organizations to provide guidelines, technical and financial assistance for effective
implementation of energy conservation in buildings. Towards energy improvement, the Government of
India enacted the followingActs Codes:
l
Energy Conservation Act, 2001: The Act provides for the legal framework, constitutional
arrangement and a regulatory mechanism at the Central and State level to embark upon energy
23
Report on Constructing change: Accelerating energy efficiency in India's buildings market'

UNEP SBCI Report on Buildings and Climate Change: Summary for Decision-Makers
25
NRDC & ASCI (2011), Saving Energy: Taking Building Efficiency to New Heights
24
164

efficiency drive in the country. There are short term and long term measures, which enforce
implementation of energy policies in phased manner.
l
Bureau of Energy Efficiency, 2002: Bureau of Energy Efficiency (BEE) operates complete pilot
phase of programmes for energy efficiency in government buildings and prepare action plan for
wider dissemination and implementation.
Energy Saving Companies: They undertake energy efficiency projects through third party
financing which enables the consumers to save on energy cost to a maximum extent.
National Building Code (Revised) 2005: Several changes are brought out in the recently revised
National Building Code with respect to energy conservation. Classification of climatic zones,
more details on lighting and ventilation, density norms, use of solar energy, extending energy
conservation measures to commercial buildings etc. are the provisions provided.
Energy Conservation Building Code: The Energy Conservation Building Code (ECBC),
developed by the Bureau of Energy Efficiency (BEE), prescribes a minimum standard for energy
use in new and major retrofits of buildings. The connected load requirement for buildings to
comply is 100 kW or 120 kVA, which enables commercial and high- rise residential buildings
(approximately 5 stories or higher) to come under the code's purview. The ECBC establishes
minimum requirements for energy-efficient building design and construction.
National Action Plan on Climate Change: The National Action Plan on Climate Change
(NAPCC) was released by Honourable Prime Minister of India in June, 2008, outlining existing
and future policies and programs addressing climate mitigation and adaptation. The Plan
identifies eight core "national missions" running through 2017 including the National Mission on
Sustainable Habitat, which seeks to promote sustainability of habitats through improvements in
energy efficiency in buildings, urban planning, improved management of solid and liquid waste,
model shift towards public transport and conservation through appropriate changes in legal and
regulatory framework and the National Mission on Enhanced Energy Efficiency (NMEEE) and
directs ministries to submit detailed implementation plans to the Prime Minister's Council on
Climate Change by December 2008. Emphasizing the overriding priority of maintaining high
economic growth rates to raise living standards, the plan "identifies measures that promote our
development objectives while also yielding co-benefits for addressing climate change
effectively." It says these national measures would be more successful with assistance from
developed countries, and pledges that India's per capita greenhouse gas emissions "will at no point
exceed that of developed countries even as we pursue our development objectives." Para 4.2 of the
NationalAction Plan on Climate Change mandates:
l
A market based mechanism to enhance cost effectiveness of improvements in energy

efficiency in energy-intensive large industries and facilities, through certification of
energy savings that could be traded. (PerformAchieve and Trade)
Accelerating the shift to energy efficient appliances in designated sectors through

innovative measures to make the products more affordable. (Market Transformation for
Energy Efficiency)
Creation of mechanisms that would help finance demand side management programmes
in all sectors by capturing future energy savings. (Energy Efficiency Financing Platform)
Developing fiscal instruments to promote energy efficiency (Framework for Energy

Efficient Economic Development)
Further, during the 11th Five Year Plan, the Bureau of Energy Efficiency (BEE) had
165
introduced standards and labelling programme for 13 household appliances. The labels
were made mandatory for four appliances, namely, frost-free refrigerators, room airconditioners, tube lights, and transformers. It is estimated that the standards and labelling
programme had avoided an installed capacity of 7500 MW during the 11th Plan.
l
During the 12th Five Year Plan (2012-17), the Super-Efficient Equipment Programme
(SEEP) will incentivize the sale of super-efficient fans, light emitting diode (LED)
lighting, and tube lights for their large-scale adoption. This would build confidence in
manufacturers to invest in the development, manufacturing, and marketing of these
products, which otherwise would be limited because of the higher upfront cost of these
products. The incentives will be gradually decreased with increase in sales and reduction
of the product first cost. It is estimated that SEEP for efficient fans and lights alone will
avoid 1500 MW of installed capacity during the 12th Plan.
Energy efficiency in residential buildings is also promoted through various voluntary
building rating systems such as Indian Green Building Council (IGBC) Green Homes,
Green Rating for Integrated Habitat Assessment (GRIHA), Small Versatile Affordable
(SVA) GRIHA and Eco-housing. Incentives like fast-track environmental clearance of
pre-certified projects by the Ministry of Environment and Forests (MoEF) and additional
floor area ratio FAR and tax incentives by some urban local bodies (ULBs) are also
available.
7.4
Steps taken by NHB

National Housing Bank (NHB), through its "Promotional Programme for Energy Efficient New
Residential Housing in India" seeks to address the challenges associated with the implementation of
energy efficient measures in residential buildings and promote the adoption of energy efficient measures
in residential buildings through a slew of measures.
KFW, the German Development Bank, is financing a Promotional Programme for Energy Efficient New
Residential Housing in India. This Programme was initiated jointly by NHB and KfW in 2008 pursuant
to Indo - German Government-to-Government negotiations. Under the programme, a line of Credit of
EURO 50 million was provided to NHB for refinancing individual home buyer loans for new residential
housing, meeting a minimum of 30% improvement in energy efficiency over the benchmark building in
case of active measures and 18% improvement in case of passive measures. The focus of the programme
is on typical, middle income apartment developments.
The objective is the successful implementation of a "Promotional Programme for Energy Efficient New
Residential Housing in India", which would contribute to a sustainable energy supply by encouraging
the use of energy efficient technologies and building methods (energy efficient design, energy efficient
heating, lighting and cooling systems or improved insulation to improve energy efficiency in housing).
The same would result in a mitigation of climate change resulting from CO2 emission savings through an
increase in energy efficiency.
With respect to the funding mechanism, the line of credit extended to NHB by KfW, Germany will be
made available to Primary Lending Institutions (PLIs) viz. Banks and Housing Finance Companies
under a Refinance Scheme developed for the Programme. With respect to future development, training
and capacity building under the Programme, a 'Facilitator' has been appointed. The facilitator is
responsible for overall coordination with Primary Lending Institutions and building developers for
developing initial pipeline for identification/development of ready building projects in order to ensure
early utilization of funds available under the Programme. For facilitating the calculation of potential
energy savings by a household under the Programme, a very simple and ready-to-use assessment tool
had been specifically developed by Fraunhofer IBP, Germany and TERI, who were engaged as external
166

experts. IT-toolkit calculates the energy need of a building as a whole and the potential savings offered by
active and passive energy efficiency measures based on the building design. The IT toolkit allows the
user to enter data regarding the parameters of the building project being assessed, key features of the
building envelope such as geometry, orientation and building materials, and data on the technologies
used for space cooling, heating, lighting and hot water.
Besides information on the national benchmark regarding energy use in the residential sector in India, the
toolkit includes case studies on energy efficient residential buildings and provides information on select
energy efficiency technologies. Based on the level of energy savings by way of adoption of various
energy efficient parameters (active and passive measures), an initial certification is provided to the
potential individual borrowers for use in the loan procurement process. The certification and
accreditation for projects under the Programme are provided by Fraunhofer, IBP and TERI. This ITtoolkit is available under public domain and can be accessed through the NHB-KfW Homes EE Program
website http://www.ee-homes.com/
Further, NHB's Refinance Scheme for Installation of Solar Water Heating and Solar Lighting
Equipments in Homes, to promote use of solar equipment in the domestic context has till date directly
impacted the life of more than 16,000 underserved households.
7.5
Benefits to various Stakeholders under the Programme are Benefits for Building Developers
l
First-mover in the promising field of energy efficiency housing and a step towards CSR.
The Certification and labeling helps improved marketability of the project and adds value to
the project which helps attracting customers in the highly competitive residential housing
market.
Cost-free advisory services and training for energy efficiency measures.
Get access to our easy-to-use IT-toolkit ResBuild to calculate energy savings.
l
l
Benefits for PLIs and HFCs

l
l
l
l
l
Attractive refinancing conditions from NHB, usually rebate of up to 25 basis points.

Front-runner in the promotion of future-oriented financial products.
Benefits from extensive training on energy efficiency in the housing sector.
Increased attractiveness to customers.
Strengthened corporate social responsibility portfolio.
Benefits to Occupants / End users

l
l
l
l
l
l
7.6
Low energy, waste disposal and water cost

Benefits of lower rate of interest passed on by the PLI to the beneficiary.
Lower operational and maintenance costs.
Lower emissions and environment costs.
Better health and satisfaction.
Demonstration of commitment to sustainability and environmental stewardship.
Building Energy Efficiency

Everyone benefits from energy efficiency in buildings, from workers and landlords to tenants and civil
society. Identifying the groups responsible for the successes of, and obstacles to, energy efficiency is
critical to building a roadmap with targeted actions for each stakeholder to capitalize on the opportunity
to save energy. But the challenges associated with the implementation of energy efficient measures in
167
residential buildings are many and varied. There is lack of awareness regarding the technical and
financial potential of energy efficient solutions on the part of end-users. The limited availability and high
costs of energy efficient construction material and appliances have hindered their mass adoption
To add to it, there are concerns on the part of end users that incremental expenditure on energy efficiency
measures may inflate their purchase consideration. From the technical aspect, it cannot be ignored that
specialists like architects and energy auditors lack sufficient expertise in this area of work as it is still in a
nascent stage. Moreover, technical standards and calculation tools have not been widely introduced to
support implementation and adoption. From the legal perspective, much needs to be done with respect to
the development and propagation of energy efficiency codes for buildings in the country and mandate
their legal requirement.
India's economic growth can only be sustained with corresponding to growth in infrastructure. Presently
the growing demand is being met by crumbling infrastructure, such as road networks, city transport,
water and sanitation, etc. A solution to the contradiction requires a massive enlargement of urban
infrastructure, which will further require newer green and sustainable techniques for building this
infrastructure. These newer techniques encapsulate the foundation of green buildings. Energy
consumption and associated greenhouse gas emissions will continue to rise unless actions to direct the
construction industry towards sustainable consumption and production are urgently taken. The objective
of sustainable development is to reduce the baseline energy consumption through adoption and
implementation of efficiency measures in buildings, by the use of energy efficient passive and active
techniques.
Compact Energy efficiency is a growing policy priority for many countries around the world. It is widely
recognized as the most cost-effective and readily available means to address numerous energy-related
issues, including energy security, the social and economic impacts of high energy prices and concerns
about climate change. At the same time, energy efficiency increases competitiveness and promotes
consumer welfare.
All the stakeholders viz. the Central and State Governments by way of setting standards for the bottom of
the buildings market and supporting the top of the market to accelerate energy efficient construction. The
real estate developers and the Financial institutions need to work together to make the concept of Energy
efficiency more affordable and sustainable. The recent launch of three landmark initiatives for Energy
Efficiency by the Government of India viz., "Design Guidelines for Energy Efficient Multi-Storey
Residential Buildings and Star Ratings for Diesel Gensets and for Hospital Buildings"26 are supposed to
encourage all stakeholders to take part in the implementation energy efficiency initiatives.
Box 6 : Design Guidelines for Energy-efficient Multi-storey Residential Buildings by BEE -
Recommendations on energy-efficiency features for consideration at the design stage of

multi-storey residential buildings
The six sections under which these recommendations are featured in are:
1.
26
Building massing and spatial configuration

l
Recommendation 1: Orient the buildings to minimize solar exposure on external vertical

surfaces
Recommendation 2: Select the building shape to minimize solar exposure on wall surfaces
Recommendation 3: Arrange building blocks to benefit from mutual shading to minimise solar
Bureau of Energy Efficiency (BEE) (Website:http://www.bee.india.nic.in)

168
exposure on walls during summer months

2.
3.
4.
Building envelope
l
Recommendation 4: Incorporate passive design measures for walls and windows for
reduced energy consumption and improved thermal comfort
Recommendation 5: Design for adequate day-lighting
Recommendation 6: Insulate the roof and provide reflective surface
Space cooling
l
Recommendation 7: Design for raised cooling set-point of around 28 C
Recommendation 8: Design the space-cooling system so as to utilise the full potential of

evaporative cooling and fans
Recommendation 9: Incorporate energy-efficiency measures in the air-conditioning system
Recommendation 10: Design for quick and efficient evacuation of hot air generated in the
kitchen
Appliances
l
5.
6.
Recommendation 11: Select higher BEE star-labelled energy-efficient equipment and

appliances
Common services
l
Recommendation 12: Energy-efficient lighting design for common areas
Recommendation 13: Energy-efficient community water pumping system
Recommendation 14: Incorporate energy-efficiency design features in the design of lifts
Renewable energy integration

l
Recommendation 15: Incorporate energy-efficiency design features in the design of lifts
169
Chapter-7
Area
Focus: of
Sustainable
Energy
Efficient Housing
Report
on Trend
andof
Progress
Housing in
India 2014
Chapter 8
Way Forward
House is pivotal for mankind's moral and substance development ever since the dawn of civilization. Adequate
housing is essential for human survival with dignity. There are many things that we would find difficult, if not
impossible to do without good-quality housing. Housing shortage is a universal phenomenon. It is more acute in
developing countries. The housing dimension in India has been changing in recent years. India has initiated
many reforms in housing that have taken many forms and manifestations characterized by the reduction in
social allocation, cutbacks in public funding and promotion of a real estate culture in close partnership between
the Government and private actors.
Since home life affects the very foundation of an individual's life, the house becomes an important part of it and
housing attains the top priorities for most people, regardless of their income levels. There has been increasing
concern about the housing condition of the poor in the slums settlements in housing and investment policies.
The declining effectiveness of housing finance institutions coupled with economic and fiscal crises have made
governments more aware of the need to promote savings, reduce subsidies and mobilize domestic resources and
motivate the involvement of private financial institutions. Housing finance has risen to the top of research and
policy agendas in recent years.
As per 2011 census, the country had a population of 1210.98 million out of which, 377.10 million (31.16%)
lived in urban areas. During 2001-2011, the urban population of India grew at a CAGR of 2.8% resulting in the
increase in level of urbanization from 27.81% to 31.16%. This growing concentration of people in urban areas
has led to problems of land shortage, housing shortfall and congested transit and has also severely stressed the
existing basic amenities such as water, power and open spaces of the town and cities. According to the 201census, the housing stock in urban India stood at 78.48 million for 78.86 million urban households. Through the
gap between household and housing stock is narrowing, actual shortage is high due to a certain part of current
stock being dilapidated and people living in congested dwelling. There is a gap between the demand and supply
of housing (both in terms of quantity and quality) in urban India. India possesses the elements of very strong
demand growth in housing market in the coming decades.
Housing in India has emerged as one of the most vibrant and dynamic sector for the country's economy,
contributing approximately 5%-6% of the country's GDP. The contribution of the real estate sector to India's
gross domestic product (GDP) has been estimated at 6.3% in 2013 and the segment is expected to generate 7.6
million jobs during the same period. It is also expected to generate more than 17 million employment
opportunities across the country by 202527.
The housing finance industry today comprises the entire banking sector, Housing Finance Companies (HFCs),
cooperative and other institutions viz. ACHFS, ARDBs, MFIs, NBFCs, etc. The policy and regulatory
framework of the regulators has consistently encouraged the industry to adopt market based solutions with due
regard to soundness, affordability and stability. The quality of assets in the mortgage industry is among the best
in the economy.
27
Confederation of Real Estate Developers' Associations of India-, Report on assessing the economic impact of India's
real estate sector - 2013
170
Chapter-8 Way Forward

Retail housing finance is, today, available from a diverse set of institutions at competitive terms as the sector has
become increasingly demand driven. Facilitating and catalyzing the credit flow in the housing sector, NHB's
enabling policies have supported the expansion in home ownership in the country. The number of housing
finance companies has grown over the years and was 59 in number at the end of June 30, 2014. NHB, through
the years, has sought to perform its multiple roles in a mutually synergic manner, consistent with its Charter and
has endeavored to develop a sound, stable and sustainable housing finance system in the country. Introduction
of new products, which connect the housing finance sector to the larger economy, is the emerging need of the
sector. NHB's efforts are also directed at such initiatives that include development of the securitization market,
credit enhancement measures such as mortgage guarantee / insurance, conceiving covered bonds in the Indian
context, risk mitigation through Central Registry, title insurance, etc. With NHB's catalyzing role, the balance
sheet of the sector has consistently grown and improved in terms of flow of credit and quality of assets.
One of the biggest challenges facing the housing finance industry today is the lack of formal credit flow to the
lower income segments for their housing needs. This has resulted in a huge shortage of housing for these
segments, and a multi-pronged effort is required to address the problem in all its dimensions. Among other
things, the recently set up 'Credit Risk Guarantee Fund Trust for Low Income Housing', established by the
Government of India and administered by NHB, is expected to leverage institutional financing for the smaller
borrowers.
NHB through its refinance window provides the retail lending institutions with an economical and efficient
source of raising funds for their housing finance operations. Today, NHB offers a range of refinance products
aimed at fulfilling the needs of the various sub-segments of the market, from rural housing to urban low income
housing, housing for women, energy efficient housing and solar lighting and water heating equipment. NHB is
also engaged in developing products for low and moderate income households. NHB is offering this product to
the primary lending institutions at concessional rates as an incentive for them to extend long term fixed rate
loans to the vast segments of the population in need of such support.
The initiatives by the Government of India like allowing FDI up to 100 per cent in development projects for
townships and settlements, approval of the Real Estate (Regulation and Development) Bill, 2013, setting up the
Urban Housing Fund and impetus to Subsidy Schemes like the Rajiv Rinn Yojana have further lent strength to
the sector.
The recent budget announcements related to housing sector are very encouraging. With the allocation of
` 8,000 crore to support rural housing and ` 4,000 crore for affordable housing to NHB the Flow of credit for
housing to the rural and urban poor/EWS/LIG segments will increase. Further, the Government has mandated
to provide 'Housing for All by 2022'. With this objective the Hon'ble Finance Minister in his Budget Speech
announced the setting up of a Mission on Low Cost Affordable Housing which will be anchored in the National
Housing Bank. The Scheme will incentivize the development of low cost affordable housing. Similar Policybased efforts like providing tax sops for the Real Estate Investment Trusts (REITs), as announced in the Union
Budget of 2014-15, could result in extracting new growth opportunities through Rental, Affordable and Senior
Citizen Housing projects that can increase the depth of the industry. REITs have been successfully used as
instruments for pooling of investment in several countries and such instruments will definitely attract long term
finance from foreign and domestic sources including the NRIs. REITs would reduce the pressure on the banking
system while also making available fresh equity.
Mortgages are the retail banking opportunity in an economy. The total mortgages in the books of the banks have
grown from 1.5 percent to 10 percent of the total bank advances in the last decade. The ratio of total outstanding
mortgages to the GDP is currently around 9 per cent. If by 2020, this ratio were to reach 20 percent, a number
similar to that of China, we could expect the mortgage industry growing at an average rate of over 20 percent
during the next decade.
To enable the housing finance market to function more efficiently, there is a need for the adoption of uniform
practices by the housing finance industry relating to matters like appraisal and documentation, conversion of
171
fixed rate loans into floating rate loans etc. A greater degree of transparency in dealings with the customers will
enable them to exercise informed choices about products and lending institutions.
To conclude, housing finance in India has done remarkably well particularly over the last two decades. The
market needs to be deepened and widened. Gaps are required to be filled in both supply and demand sides and
calls for innovations, orientation towards the un-served and under-served segments of the society.
172
Abbreviations
ARDBs
ACHFs
APL
BPL
CERSAI
CEO
CII
CPWD
CRGFTLIH
CTR
CPI
DFI
ECBs
EEHRS
EMI
EWS
GDP
GFD
GJRHRS
GoI
GRIDS
HFCs
HFIS
HUDCO
ISHUP
IT
JNNURM
KYC
NAC
LAN
LIG
NGOs
NPA
MBS
MoHUPA
MOU
MIG
NCHF
NHB
NIPFP
PLIs
PMLA
PSBs
PPP
RRY
Agriculture Rural Development Bank

Apex Cooperative Housing Federations
Above Poverty Line
Below Poverty Line
Central Registry of Securitization Asset Reconstruction and Security
Interest of India
Chief Executive Officer
Confederation of Indian Industry
Central Public Works Department
Credit Risk Guarantee Fund Trust for Low Income Housing
Cash Transaction Report
Consumer Price Index
Development Finance Institution
External Commercial Borrowings
Energy Efficient Housing Refinance Scheme
Equated Monthly Installment
Economically Weaker Section
Gross Domestic Product
Gross Fiscal Deficit
Golden Jubilee Rural Housing Refinance Scheme
.
Government of India
Grievance Registration & Information Database System
Housing Finance Institutions
Housing and Urban Development Corporation Ltd
Interest Subsidy Scheme for Housing the Urban Poor
Information Technology
Jawaharlal Nehru National Urban Renewal Mission
Know Your Customer
NotifiedArea Councils
Local Area Network
Lower Income Group
Non-Governmental Organizations
Non-PerformingAsset
Mortgage Backed Security
Ministry of Housing & Urban Poverty Alleviation
Memorandum of Understanding
Middle Income Group
National Cooperative Housing Federation of India
National Housing Bank
National Institute of Public Finance and Policy
Primary Lending Institutions
Prevention of Money Laundering Act, 2002
Public Sector Banks
Public Private Partnership
Rajiv Rinn Yojana
173
RBI
REITs
RHF
RML
RMLA
RO
RRBs
SCBs
SLCC
UCBs
ULBs
USAID

Real Estate Investment Trusts
Rural Housing Fund
Reverse Mortgage Loan
Reverse Mortgage Loan enabled Annuity
Regional Office
Scheduled Commercial Banks
State Level Coordination Committee
Urban Co-operative Banks
Urban Local Bodies
United States Agency for International Development
174

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Trends in Housing Finance in India

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Report on Trend

Report on Trend and Progress of Housing in India 2014

Overview of the Indian Housing Sector

Policy Environment for Housing and Housing Finance

Role of National Housing Bank

Operations and Performance of Housing Finance Institutions

Institutional Performance viz-a-viz Housing Finance

Area of Focus: Sustainable Energy Efficient Housing

Report on Trend and Progress of Housing in India 2014

Report on Trend and Progress of Housing in India 2014

Trend in Outstanding Housing Loans of PSBs

List of Box Items

Excerpts from the Economic Survey 2014-15

NHB's Financial Performance at a Glance

NHB (ND)/ CMD /3985 /2015

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Report on Trend and Progress of Housing in India 2014

NHB (ND)/ CMD /3986 /2015

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Global Economy Outlook

World Economic Outlook April 2014

Reserve Bank of India Annual Report 2013-14

Report on Trend and Progress of Housing in India 2014

Other Advanced Economies

Emerging Market and

Central and Eastern Europe

IMF Regional Outlook (Asia), April 2014

Middle East, North Africa,

Sub -Saharan Africa

World Growth Based on

World Trade Volume (goods

Emerging Market and

Emerging Market and

On U.S. Dollar Deposits

On Euro Deposits (3 month)

On Japanese Yen Deposits

Imports (goods and

Commodity Prices (U.S.

London Interbank Offered

Report on Trend and Progress of Housing in India 2014

Gross Domestic Product

Trade, hotels, transport &

Financing, insurance, real

Community, social &

Mining & quarrying

GDP at factor cost

Report on Trend and Progress of Housing in India 2014

Indian Economy: Prospects for FY 2014-15

RBI's Financial Stability Report (FSR) June 2014

India needs sharp fiscal correction

GDP growth seen at 5.4-5.9 percent in 2014-15

Rationalization of subsidies such as fertilizer and food essential

NHB-RESIDEX-The Residential Property Price Index

Report on Trend and Progress of Housing in India 2014

Report on Trend and Progress of Housing in India 2014

Table 4 : Estimated Housing Shortage in India: 2012-2017

Chapter-2 Overview of the Indian Housing Sector

Graph 3: Projection of Growth of Urban Population in India

India Urbanization Econometric Model; McKinsey Global Institute analysis

Report on Trend and Progress of Housing in India 2014