NATIONAL HOUSING BANK ACT, 1987
(1) This Act may be called the National Housing Bank Act, 1987.
(2) It extends to the whole of India.
(3) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and any reference in any provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
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1. Came into force on 9-7-1988, vide S.O. 684(E), dated 9th July, 1988, (except Chapter V and sub-section (3) of section 49) Chapter V and sub-section (3) of section 49 came into force on 1-6-1989, vide S.O. 394(E), dated 1st June, 1989.
In this Act, unless the context otherwise requires,—
(a) “Board” means the Board of Directors of the National Housing Bank referred to in section 6;
(b) “Chairman” means the Chairman of the Board appointed under section 6;
(c) “director” means a director appointed under section 6;
(d) “housing finance institution” includes every institution, whether incorporated or not, which primarily transacts or has as 1[one of its principal objects], the transacting of the business of providing finance for housing, whether directly or indirectly;
(e) “Managing Director” means the Managing Director appointed under section 6;
(1) With effect from such date as the Central Government may, by notification, appoint, there shall be established for the purposes of this Act, a bank to be known as the National Housing Bank.
(2) The National Housing Bank shall be a body corporate with the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract, and may, by that name, sue and be sued.
(3) The head office of the National Housing Bank shall be at Bombay* or at such other place as the Reserve Bank may, by notification, specify.
(4) The National Housing Bank may establish offices, branches or agencies at any place in India, and with the previous approval of the Reserve Bank, at any place outside India.
1 [(1) The authorised and paid-up capital of the National Housing Bank shall be three hundred and fifty crores of rupees:
Provided that the Central Government may, in consultation with the Reserve Bank, by notification, increase the authorised capital up to two thousand crores of rupees.
(2) The Board may, on such terms and conditions, as determined by it from time to time, issue the increased authorised capital to the Reserve Bank, the Central Government, scheduled banks, public financial institutions, housing finance institutions or such other institutions, as may be approved by the Central Government:
Provided that no increase in the issued capital shall be made in such manner that the Reserve Bank, the Central Government, public sector banks, public financial institutions or other institut
(1) The general superintendence, direction and management of the affairs and business of the National Housing Bank shall vest in the Board of Directors, which shall exercise all powers and do all acts and things, which may be exercised or done by the National Housing Bank.
(2) Subject to the provisions of the Act, the Board, in discharging its functions, shall act on business principles with due regard to public interest.
(3) Subject to the provisions of sub-section (1) and save as otherwise provided in the regulations made under this Act,—
1[(a) the Chairman, if he is a whole-time director or if he is holding offices both as the Chairman and the Managing Director, or
(b) the Managing Director, if the Chairman is not a whole-time
(1) The Board of Directors of the National Housing Bank shall consist of the following, namely:—
(a) a Chairman and a Managing Director:
Provided that the same person may be appointed as Chairman and as Managing Director;
(b) 1[two directors] from amongst the experts in the field of housing, architecture, engineering, sociology, finance, law, management and corporate planning or in any other field, special knowledge of which is considered useful to the National Housing Bank;
2[(c) two directors, who shall be persons with experience in the working of institutions involved in providing funds for housing or engaged in housing development or have experience in the working of financial institutions or schedul
(1) The Chairman and the Managing Director shall hold office for such term, not exceeding five years and shall receive such salary and allowances and be governed by such terms and conditions of service as the Central Government may, in consultation with the Reserve Bank, specify and shall be eligible for re-appointment:
Provided that the Chairman or, as the case may be, the Managing Director shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.
(2) The directors referred to in 1[clauses (b), (c) and (ca)] of sub-section (1) of section 6 shall hold office for a term of three years:
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(3) The Central Government may, in consultation with the Reserve Bank, remove the Chairman or the M
No person shall be a director of the Board, if he—
(a) is, or becomes of unsound mind and has been so declared by a competent court; or
(b) is or has been convicted of any offence which, in the opinion of the Central Government, involves moral turpitude; or
(c) is, or at any time has been, adjudicated as insolvent or has suspended payment of his debts or has compounded with his creditors; or
(d) has, for any reason, been removed or dismissed from the service of—
(i) the Government, or
(ii) the Reserve Bank, the State Bank or any other bank, or
(1) If a director—
(a) becomes subject to any of the disqualifications mentioned in section 8; or
(b) is absent without leave of the Board for three or more consecutive meetings thereof,
his seat shall thereupon become vacant.
(2) Any director may resign his office by giving notice thereof in writing to the authority that appointed or, as the case may be, nominated him and on his resignation being accepted by such authority or if his resignation is not sooner accepted, on the expiry of three months from the receipt thereof by such appointing authority, he shall be deemed to have vacated his office.
If the Chairman, or as the case may be, the Managing Director, is by infirmity or otherwise rendered incapable of carrying out his duties or is absent on leave or otherwise, in circumstances not involving the vacation of his appointment, the Central Government may, appoint another person to act in his place during his absence.
(1) The Board shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings, as may be prescribed.
(2) The Chairman, or, if for any reason he is unable to attend a meeting of the Board, the Managing Director, or, in the event of both the Chairman and the Managing Director being unable to attend a meeting, any other director nominated by the Chairman in this behalf and in the absence of such nomination, any director elected by the directors present from among themselves at the meeting, shall preside at the meeting.
(3) All questions which come up before any meeting of the Board shall be decided by a majority of votes of the directors present and voting, and in the event of an equality of votes, the Chairman, or, in his absence, the person presiding, shall have a seco
(1) The Board may constitute an Executive Committee consisting of such number of directors as may be prescribed.
(2) The Executive Committee shall discharge such functions as may be prescribed, or, as may be delegated to it, by the Board.
(3) The Board may constitute such other committees, whether consisting wholly of directors or wholly of other persons or partly of directors and partly of other persons as it thinks fit for such purposes, as it may decide and any committee so constituted shall discharge such functions as may be delegated to it by the Board.
(4) The Executive Committee or any other committee constituted under this section shall meet at such times and places and shall observe such rules of procedure in regard to transaction of business at its meetings, as may be prescribed.
Any director of the Board or any member of a committee, who has any direct or indirect pecuniary interest in any matter coming up for consideration at a meeting of the Board or a committee thereof, shall, as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and the disclosure shall be recorded in the minutes of the Board, or the committee, as the case may be, and the director or member shall not take any part in any deliberation or decision of the Board or the committee with respect to that matter.
Subject to the provisions of this Act, the National Housing Bank may transact all or any of the following kinds of business, namely:—
(a) promoting, establishing, supporting or aiding in the promotion, establishment and support of housing finance institutions;
1[(b) making of loans and advances or rendering any other form of financial assistance whatsoever for housing activities to housing finance institutions, scheduled banks, state co-operative agricultural and rural development banks or any other institution or class of institutions as may be notified by the Central Government;
(ba) making of loans and advances for housing or residential township-cum-housing development or slum clearance projects;]
(c) subscribi
(1) The National Housing Bank may, for the purpose of carrying out its functions under this Act—
(a) issue and sell bonds and debentures with or without the guarantee of the Central Government, in such manner and on such terms as may be prescribed;
(b) borrow money from 1[the Central Government, scheduled banks, financial institutions, mutual funds] and from any other authority or organisation or institution approved by that Government on such terms and conditions as may be agreed upon;
(c) accept deposits repayable after the expiry of 2[such period and] on such terms as may generally or specially be approved by the Reserve Bank:
3[Provided that nothing contained in this clause shall apply to d
(1) Notwithstanding anything contained in the Foreign Exchange Regulation Act, 1973 (46 of 1973), or in any other law for the time being in force relating to foreign exchange, the National Housing Bank may, for the purpose of making loans and advances under this Act, borrow in such manner and on such conditions as may be prescribed in consultation with the Reserve Bank and with the previous approval of the Central Government, foreign currency from any bank or financial institution in India or elsewhere.
(2) The Central Government may, where necessary, guarantee any loan taken by the National Housing Bank under sub-section (1) or any part thereof as to the repayment of principal and the payment of interest and other incidental charges.
Where any person or institution seeks any financial assistance from the National Housing Bank on the security of any immovable property belonging to him or to that institution or on the security of the property of some other person whose property is offered as a collateral security for such assistance, such person or institution or, as the case may be, such other person may execute a written declaration in the form set out in the Third Schedule to this Act stating therein the particulars of the immovable property which is proposed to be offered as security, or as the case may be, collateral security, for such assistance and agreeing that the dues relating to the assistance, if granted, shall be a charge on such immovable property and, if on receipt of such declaration, the National Housing Bank grants any financial assistance to the person or institution aforesaid, the dues relating to such assistance shall, without prejudice
(1) Any sums received by a borrowing institution in repayment or realisation of loans and advances financed or refinanced either wholly or partly by the National Housing Bank shall, to the extent of the accommodation granted by the National Housing Bank and remaining outstanding, be deemed to have been received by the borrowing institution in trust for the National Housing Bank, and shall accordingly be paid by such institution to the National Housing Bank.
(2) Where any accommodation has been granted by the National Housing Bank to a borrowing institution, all securities held, or which may be held, by such borrowing institution on account of any transaction in respect of which such accommodation has been granted, shall be held by such institution in trust for the National Housing Bank.]
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The rights and interests of the National Housing Bank (including any other rights incidental thereto) in relation to any loan or advance made, or any amount recoverable, by it, may be transferred by the National Housing Bank, either in whole or in part, by the execution or issue of any instrument or by the transfer of any instrument by endorsement, or in any other manner in which the rights and interests in relation to such loan or advance may be lawfully transferred, and the National Housing Bank may, notwithstanding such transfer, act as the trustee within the meaning of section 3 of the Indian Trusts Act, 1882 (2 of 1882), for the transferee.
The National Housing Bank shall have the right to acquire by transfer or assignment, the rights and interests of any 1[institution] (including any other rights incidental thereto) in relation to any loan or advance made, or any amount recoverable by such institution, either in whole or in part, by the execution or issue of any instrument or by the transfer of any instrument or in any other manner in which the rights and interests in relation to such loan or advance may be lawfully transferred.
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1. Subs. by Act 15 of 2000, sec. 10, for "housing finance institution" (w.e.f. 12-6-2000).
Notwithstanding anything contained in sub-section (1) of section 17 of the Registration Act, 1908 (16 of 1908),—
(a) any instrument in the form of debt obligations or trust certificate of beneficial interest or other instruments, by whatever name called, issued by the National Housing Bank to securities the loans granted by the housing finance institutions and scheduled banks, and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it entitles the holder to an undivided interest afforded by a registered instrument, whereby the National Housing Bank has acquired the rights and interests in relation to such loans and in securities therefor; or
(b) any transfer of such instruments referred to in clause (a),
&
Where any amount is due under an agreement to the National Housing Bank, whether acting as a trustee or otherwise, in respect of securitisation of loans of housing finance institutions and scheduled banks, the National Housing Bank may without prejudice to any other mode of recovery make an application to the State Government for the recovery of the amount due to it, and if the State Government or such authority, as that Government may specify in this behalf, is satisfied that any amount is due, it may issue a certificate for the amount to the Collector and the Collector shall proceed to recover that amount in the same manner as arrear of land revenue.]
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1. Ins. by Act 15 of 2000, sec. 11 (w.e.f. 12-6-2000).
In entering into any transaction under this Chapter with any borrowing 1[institution] the National Housing Bank may impose such conditions as it may think necessary or expedient for protecting the interests of the National Housing Bank.
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1. Subs. by Act 15 of 2000, sec. 12, for "housing finance institution" (w.e.f. 12-6-2000).
Notwithstanding anything to the contrary in any agreement, the National Housing Bank may, by notice in writing, require any borrowing 1[institution] to discharge forthwith in full its liabilities to the National Housing Bank—
(a) if it appears to the Board that false or misleading information in any material particular was given in the application for the loan or advance; or
(b) if the borrowing 1[institution] has failed to comply with any of the terms of the agreement with the National Housing Bank in the matter of the loan or advance; or
(c) if there is a reasonable apprehension that the borrowing 1[institution] is unable to pay its debts or that proceedings for liquidation may be commenced in respect thereof; or
(1) The National Housing Bank shall have free access to all such records of any 1[institution] which seeks to avail of any credit facilities from the National Housing Bank and to all such records of any person who seeks to avail of any credit facilities from such housing finance institution, the perusal of which may appear to the National Housing Bank to be necessary in connection with the providing of finance or other assistance to such 1[institution] or the refinancing of any loan or advance made to such person by that 1[institution].
(2) The National Housing Bank may require any institution or person referred to in sub-section (1), to furnish to it copies of any of the records referred to in that sub-section and the institution or the person, as the case may be, shall be bound to comply with such requisition.
&n
Notwithstanding anything to the contrary contained in any other law for the time being in force, the validity of any loan or advance made by the National Housing Bank in pursuance of the provisions of this Act shall not be called in question merely on the ground of non-compliance with the requirements of such other law or of any resolution, contract, or any instrument regulating the constitution of the borrowing 1[institution]:
Provided that nothing in this section shall enable any company or co-operative society to obtain any loan or advance where the instrument relating to the constitution of such company or co-operative society does not empower such company or co-operative society so to do.
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1. Subs. by Act 15 of 2000, sec. 12, for "ho
The National Housing Bank shall not make any loan or advance on the security of its own bonds or debentures.
(1) The National Housing Bank may at any time and shall, on being directed so to do by the Reserve Bank, cause an inspection to be made by one or more of its officers of any 1[institution] to which the National Housing Bank has made any loan or advance or granted any other financial assistance, and its books, accounts and other documents; and the National Housing Bank shall supply to the 1[institution] a copy of its report on such inspection.
(2) It shall be the duty of every officer, employee or other person or persons incharge of the whole or part of the affairs of the 1[institution] to produce to any officer making an inspection under sub-section (1), all such books, accounts and other documents in his custody or power and to furnish within such time as the said officer may specify, any statements, information relating to the affairs of the 1[institution] as the said officer may
(1) The National Housing Bank may, for the purpose of the efficient discharge of its functions under this Act, at any time direct any 1[institution] to submit to it credit information in such form and within such time as may be specified by the National Housing Bank from time to time.
(2) Every 1[institution] shall, notwithstanding anything to the contrary contained in any law for the time being in force or in any instrument regulating the constitution thereof or in any agreement executed by it, relating to the secrecy of its dealings with its constituents, be bound to comply with any directions issued under sub-section (1).
(3) The National Housing Bank may, for the purpose of the efficient discharge of its functions under this Act collect from the Central and State Governments, local authorities, the Reserve Bank, any bank or such fina
The National Housing Bank, if it considers it in the public interest so to do, may publish any credit information or other information obtained by it under this Act, in such consolidated form or in any other forms as it thinks fit.
The National Housing Bank may provide advisory services to the Central and State Governments, local authorities and other agencies connected with housing, in respect of—
(a) formulation of overall policies aimed at promoting the growth of housing and housing finance institutions;
(b) legislation relating to matters having a bearing on shelter, housing and human settlement.
In this Chapter the term ‘deposit’ shall have the meaning assigned to it in section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934).
(1) The provisions of this Chapter shall not apply to deposits accepted by a housing finance institution which is a firm or an unincorporated association of individuals.
(2) For the removal of doubts, it is hereby declared that the firms and unincorporated association of individuals referred to in sub-section (1) shall continue to be governed by the provisions of Chapter III C of the Reserve Bank of India Act, 1934 (2 of 1934).
(1) Notwithstanding anything contained in this Chapter or in any other law for the time being in force, no housing finance institution which is a company shall commence or carry on the business of a housing finance institution without—
(a) obtaining a certificate of registration issued under this Chapter; and
(b) having the net owned fund of twenty-five lakh rupees or such other higher amount, as the National Housing Bank may, by notification, specify.
(2) Every such housing finance institution shall make an application for registration to the National Housing Bank in such form as may be specified by the National Housing Bank:
Provided that a housing finance institution which is a company in existence on the commencement of the Nat
(1) Every housing finance institution shall invest and continue to invest in India in unencumbered approved securities, valued at a price not exceeding the current market price of such securities, an amount which, at the close of business on any day, shall not be less than five per cent. or such higher percentage not exceeding twenty-five per cent. as the National Housing Bank may, from time to time and by notification, specify, of the deposits outstanding at the close of business on the last working day of the second preceding quarter.
(2) Every housing finance institution shall maintain in India in an account with a scheduled bank in term deposits or certificate of deposits (free of charge or lien) or in deposits with the National Housing Bank or by way of subscription to the bonds issued by the National Housing Bank, or partly in such account or in such deposit or partly by way
(1) Every housing finance institution which is a company shall create a reserve fund and transfer therein a sum not less than twenty per cent. of its profit every year as disclosed in the profit and loss account and before any dividend is declared.
Explanation.—A housing finance institution creating and maintaining any special reserve in terms of clause (viii) of sub-section (1) of section 36 of the Income-tax Act, 1961 (43 of 1961) may take into account any sum transferred by it for the year to such special reserve for the purposes of this sub-section.
(2) No appropriation of any sum from the reserve fund including any sum in the special reserve which has been taken into account for the purposes of reserve fund in terms of sub-section (1), shall be made by such housing finance institution except for the purpose as may be specified by th
The National Housing Bank may, if it considers necessary in the public interest so to do, by general or special order,—
(a) regulate or prohibit the issue by any housing finance institution of any prospectus or advertisement soliciting deposits of money from the public; and
(b) specify the conditions subject to which any such prospectus or advertisement, if not prohibited, may be issued.
(1) If the National Housing Bank is satisfied that in the public interest or to regulate the housing finance system of the country to its advantage or to prevent the affairs of any housing finance institution being conducted in a manner detrimental to the interest of the depositors or in a manner prejudicial to the interest of the housing finance institutions, it is necessary or expedient so to do, it may subject to the provisions of sub-section (5) of section 5, determine the policy and give directions to all or any of the housing finance institution relating to income recognition, accounting standards, making of proper provision for bad and doubtful debts, capital adequacy based on risk weights for assets and credit conversion factors for off balance-sheet items and also relating to deployment of funds by a housing finance institution or a group of housing finance institutions or housing finance institutions generally, as t
(1) The National Housing Bank may at any time direct that every housing finance institution accepting deposits shall furnish to the National Housing Bank in such form, at such intervals and within such time, such statements, information or particulars relating to or connected with deposits received by the housing finance institution, as may be specified by the National Housing Bank by general or special order.
(2) Without prejudice to the generality of the power vested in the National Housing Bank under sub-section (1), the statements, information or particulars to be furnished under sub-section (1), may relate to all or any of the following matters, namely, the amount of the deposits, the purposes and periods for which, and the rates of interest and other terms and conditions on which, such deposits are received,
(3) The National Housin
Every housing finance institution shall furnish the statements, information or particulars called for, in such form as may be prescribed and to comply with any direction given to it, under the provisions of this Chapter.
(1) The auditor of every housing finance institution shall enquire whether or not the housing finance institution has furnished to the National Housing Bank such statements, information or particulars relating to or connected with deposits received by it, as are required to be furnished under this Chapter, and the auditor shall, except where he is satisfied on such enquiry that the housing finance institution has furnished such statements, information or particulars, make a report to the National Housing Bank giving the aggregate amount of such deposits held by the housing finance institution.
1[(1A) The National Housing Bank may, on being satisfied that it is necessary so to do, in the public interest or in the interest of the depositors or for the purposes of proper assessment of the books of account, issue directions to any housing finance institution or any group of housing fin
(1) If any housing finance institution violates the provisions of any section or fails to comply with any direction or order given by the National Housing Bank under any of the provisions of this Chapter, the National Housing Bank may prohibit the housing finance institution from accepting any deposit.
(2) Notwithstanding anything to the contrary contained in any agreement or instrument or any law for the time being in force, the National Housing Bank on being satisfied that it is necessary so to do in the public interest or in the interest of the depositors, may direct, the housing finance institution against which an order prohibiting from accepting deposit has been issued, not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without prior written permission of the National Housing Bank for such period not exceeding six months from t
(1) The National Housing Bank, on being satisfied that a housing finance institution which is a company,—
(a) is unable to pay its debt; or
(b) has by virtue of the provisions of section 29A become disqualified to carry on the business of a housing finance institution; or
(c) has been prohibited by the National Housing Bank from receiving deposits by an order and such order has been in force for a period of not less than three months; or
(d) the continuance of the housing finance institution is detrimental to the public interest or to the interest of depositors of the company,
may file an application for winding up of such housing finance institution under the Companies
(1) The National Housing Bank may, at any time, cause an inspection to be made by one or more of its officers or employees or other persons (hereafter in this section referred to as the inspecting authority) of any housing finance institution accepting deposits, for the purpose of verifying the correctness or completeness of any statement, information or particulars furnished to the National Housing Bank or for the purpose of obtaining any information or particulars which the housing finance institution has failed to furnish on being called upon to do so.
(2) It shall be the duty of every director or member of any committee or other body or any person for the time being vested with the management of the whole or part of the affairs of every housing finance institution accepting deposits or other officer or employee thereof to produce to the inspecting authority all such books, acco
No persons shall solicit on behalf of any housing finance institution either by publishing or causing to be published any prospectus or advertisement or in any other manner deposits of money from the public unless—
(a) he has been authorised in writing by the said housing finance institution to do so and specifies the name of the institution which has so authorised him; and
(b) the prospectus or advertisement complies with any order made by the National Housing Bank under section 30 and with any other provisions of law for the time being in force applicable to the publication of such prospectus or advertisement.
(1) Any information relating to a housing finance institution,—
(a) contained in any statement or return submitted by such institution under the provisions of this Chapter; or
(b) obtained through audit or inspection or otherwise by the National Housing Bank,
shall be treated as confidential and shall not, except otherwise provided in this section, be disclosed.
(2) Nothing in this section shall apply to—
(a) the disclosure by any housing finance institution, with the previous permission of the National Housing Bank, of any information furnished to the National Housing Bank under sub-section (1);
(b) the publication by the Na
The National Housing Bank on being satisfied that it is necessary so to do, may, declare by notification that any or all the provisions of this Chapter shall not apply to a housing finance institution or a group of housing finance institutions either generally or for such period as may be specified subject to such conditions, limitations or restrictions as it may think fit to impose.]
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1. Ins. by Act 15 of 2000, sec. 18 (w.e.f. 12-6-2000).
The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.
(1) Every deposit accepted by a housing finance institution which is a company unless renewed, shall be repaid in accordance with the terms and conditions of such deposit.
(2) Where a housing finance institution which is a company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, such officer of the National Housing Bank, as may be authorised by the Central Government for the purpose of this section (hereinafter referred to as the "authorised officer") may, if he is satisfied, either on his own motion or on any application of the depositor, that it is necessary so to do to safeguard the interests of the housing finance institution, the depositors or in the public interest, direct, by order, such housing finance institution to make repayment of such deposit or part thereof forthwith or within such time and subject to such co
(1) Where a deposit is held by a housing finance institution to the credit of one or more persons, the depositor or, as the case may be, all the depositors together may nominate, in the manner prescribed by rules made by the Central Government under section 45ZA of the Banking Regulation Act, 1949 (10 of 1949) one person to whom in the event of the death of the sole depositor or the death of all the depositors, the amount of deposit may be returned by the housing finance institution.
(2) Notwithstanding anything contained in any other law for the time being in force, or in any deposition, whether testamentary or otherwise, in respect of such deposit, where a nomination made purports to confer on any person the right to receive the amount of deposit from the housing finance institution, the nominee shall, on the death of the sole depositor or, as the case may be, on the death of all
In this Chapter, unless the context otherwise requires,—
(a) "Appellate Tribunal" means the Appellate Tribunal established under section 36-I;
(b) "Approved institution" means—
(i) a housing finance institution which has been granted a certificate of registration under sub-section (5) of section 29A;
(ii) a scheduled bank;
(iii) National Housing bank acting as trustee or otherwise in a transaction of securitisation of housing mortgages undertaken by the National Housing Bank;
(iv) such other institutions as the Central Government may, on the recommendation of the National Housing Bank, by
(1) The Central Government may, in consultation with the National Housing Bank, by notification appoint such persons being the officers of the approved institution, as it may deem fit, to be recovery officers for the purpose of this Chapter who shall have qualifications as the Central Government may by rules made under this Act specify.
(2) The local limits within which the recovery officer shall exercise the powers conferred and perform the duties imposed on by or under this Chapter shall be such as may be specified by the Central Government by notification.
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* Section 36D ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
(1) Where any borrower, who is under a liability to an approved institution under an agreement, makes any default in repayment of any assistance or any instalment thereof or otherwise fails to comply with the terms of said agreement, then, without prejudice to the provisions of section 69 of the Transfer of Property Act, 1882 (4 of 1882), the approved institution may apply, to the recovery officer within the limits of whose jurisdiction the borrower actually and voluntarily resides, or carries on business, or personally works for grain, or the cause of action wholly or in part arises, for the sale of the proper pledged, mortgaged, hypothecated or assigned to the approved institution as security for the dues.
(2) Where an approved institution, which has to recover its dues from any borrower, has filed an application to the recovery officer under sub-section (1) and the same property
(1) On receipt of an application under section 36E, if the recovery officer is of opinion that the borrower is under a liability to an approved institution under an agreement, or has made default in repayment of the assistance or any installment thereof or has otherwise failed to comply with the terms of said agreement, he shall cause a written notice of demand in such form as may be prescribed to be served on the borrower, calling upon him to pay the amount specified in the notice within a period of ninety days from the date of service thereof or to show cause as to why the relief prayed for should not be granted.
(2) The recovery officer may after giving the applicant and the borrower an opportunity of being heard, pass such interim or final order, including the order for payment of interest from the date on or before which payment of the amount is found due up to the date of rea
(1) Where the borrower refuses or fails to comply with the order within the time specified therein the recovery officer may, take possession of any property pledged, mortgaged, hypothecated or assigned to the approved institution as security for any assistance in respect of which default has been made and transfer by way of sale, lease or otherwise such property.
(2) Any transfer by way of sale, lease or otherwise under this section shall be conducted in such manner as may be prescribed.
(3) Any transfer of property made by the recovery officer, in exercise of its powers under sub-section (1), shall vest in the transferee all rights in or to the property transferred, as if the transfer has been made by the owner of the property.
(4) Where any action has been taken against the borrower under th
(1) Where any property is sold or leased in pursuance of any power conferred by section 36E, the recovery officer may, for the purpose of taking into custody or under control any such property, request, in writing, the Chief Metropolitan Magistrate or the District Magistrate within whose jurisdiction any such property or other documents relating thereto may be situated or found to take possession thereof, and the Chief Metropolitan Magistrate or as the case may be, the District Magistrate shall, on such request being made to him,—
(a) take possession of such property and documents relating thereto; and
(b) forward them to the recovery officer.
(2) For the purpose of securing compliance with the provisions of sub-section (1), the Chief Metropolitan Magistrate or the District M
(1) The Central Government shall, by notification, establish one or more Appellate Tribunals, to be known as the Housing Finance Institutions Debt Recovery Appellate Tribunals, to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under this Act.
(2) The Central Government shall also specify in the notification referred to in sub-section (1), the areas in relation to which the Appellate Tribunals may exercise jurisdiction.
(3) Notwithstanding anything contained in sub-sections (1) and (2), the Central Government may authorise the Presiding Officer of an Appellate Tribunal to discharge also the functions of the Presiding Officer of other Appellate Tribunal.
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* Sect
An Appellate Tribunal shall consist of one person only (hereinafter referred to as the Presiding Officer of the Appellate Tribunal) to be appointed, by notification, by the Central Government.
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* Section 36J ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
A person shall not be qualified for appointment as the Presiding Officer of an Appellate Tribunal, unless he—
(a) is, or has been, or is qualified to be a District Judge;
(b) has been a member of the Indian Legal Service and has held a post in Grade II of that service for at least three years.
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* Section 36K ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
The Presiding Officer of an Appellate Tribunal shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of sixty-five years, whichever is earlier.
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* Section 36L ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
(1) The Central Government shall provide the Appellate Tribunal with such officers and other employees as that Government may think fit.
(2) The officers and other employees of the Appellate Tribunal shall discharge their functions under the general superintendence of the Presiding Officer.
(3) The salaries and allowances and other conditions of service of the officers and other employees of the Appellate Tribunal shall be such as the Central Government may by rules made under this Act specify.
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* Section 36M ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
The salary and allowances payable to and the other terms and conditions of service (including pension, gratuity and other retirement benefits) of, the Presiding Officer of an Appellate Tribunal shall be such as the Central Government may by rules made under this Act specify:
Provided that neither the salary and allowances nor the other terms and conditions of a Presiding Officer shall be varied to his disadvantage after appointment.
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* Section 36N ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
If, for any reason other than temporary absence, any vacancy occurs in the office of the Presiding Officer of an Appellate Tribunal, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Appellate Tribunal from the stage at which the vacancy is filled.
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* Section 36-O ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
(1) The Presiding Officer of an Appellate Tribunal may, by notice in writing under his hand addressed to the Central Government, resign his office:
Provided that the said Presiding Officer shall, unless he is permitted by the Central Government, to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is earliest.
(2) The Presiding Officer of an Appellate Tribunal shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehaviour or incapacity after enquiry made by a Judge of High Court in which the Presiding Officer concerned has been informed of the charges against him and given a rea
No order of the Central Government appointing any person as the Presiding Officer of an Appellate Tribunal shall be called in question in any manner, and no act or proceeding before an Appellate Tribunal shall be called in question in any manner on the ground merely of any defect in the establishment of an Appellate Tribunal.
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* Section 36Q ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
An Appellate Tribunal shall exercise the jurisdiction, powers and authority to entertain appeals against any order made or deemed to have been made by the recovery officer under this Act.
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* Section 36R ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
(1) Any person aggrieved by an order made or deemed to have been made by the recovery officer under this Chapter, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter.
(2) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made or deemed to have been made by the recovery officer is received by him and it shall be in such form and be accompanied by such fee as may be prescribed:
Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.
(3) On receipt of an appeal under sub-section (1) the Appellate Tribunal may, after giving the parties to the appe
Where an appeal is preferred by a borrower, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent. of the amount due from him as determined by the recovery officer:
Provided that the Appellate Tribunal may, for the reasons to be recorded in writing, waive or reduce the amount to be deposited under this section.
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* Section 36T ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
(1) The recovery officer and Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any regulations, the recovery officer and the Appellate Tribunal shall have power to regulate their own procedure including the places at which they shall have their sittings.
(2) The recovery officer and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him on oath;
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The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to an application made to recovery officer.
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* Section 36V ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
The Presiding Officer, other officers and employees of an Appellate Tribunal and the recovery officer shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).
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* Section 36W ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
No suit, prosecution or other legal proceedings shall lie against the Central Government or against the Presiding Officer of an Appellate Tribunal or against the recovery officer for anything which is in good faith done or intended to be done in pursuance of the provisions of this Act or any rule or regulation or order made thereunder.
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* Section 36X ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
No court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under articles 226 and 227 of the Constitution) in relation to the matter specified in this Chapter.
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* Section 36Y ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
Notwithstanding anything contained in this Act, till the establishment of the Appellate Tribunal under section 36-I for any area, the Appellate Tribunal established under section 8 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and which is functioning in that area shall exercise the jurisdiction, powers and authority conferred on the Appellate Tribunal under this Act.
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* Section 36Z ins. by Act 15 of 2000, sec. 20 (w.e.f. 12-6-2000).
(1) With effect from such date as the Reserve Bank may specify, the National Housing Bank shall establish a fund to be called the General Fund and all payments by the National Housing Bank shall be made out of the said General Fund.
(2) The Board may, and shall, if so directed by the Reserve Bank, create a special fund or a reserve fund or such other funds as may be prescribed.
(1) The balance-sheet and accounts of the National Housing Bank shall be prepared and maintained in such form and manner as may be prescribed.
(2) The Board shall cause the books and accounts of the National Housing Bank to be balanced and closed as on the thirtieth day of June each year.
After making provision for bad and doubtful debts, depreciation of assets and all other matters for which provision is necessary or expedient or which is usually provided for by bankers, the National Housing Bank shall transfer—
(i) for a period of fifteen years, following the accounting year during which the National Housing Bank is established, the amount remaining (hereafter in this section referred to as surplus) such of the funds referred to in section 37 as the Reserve Bank may specify; and
(ii) after the expiry of the said period of fifteen years, the National Housing Bank shall, after making provision for the funds referred to in section 37, transfer the balance of surplus to the Reserve Bank.
(1) The accounts of the National Housing Bank shall be audited by auditors duly qualified to act as auditors under sub-section (1) of section 226 of the Companies Act, 1956 (1 of 1956), who shall be appointed by the Reserve Bank, for such term and on such remuneration as the Reserve Bank may fix.
(2) The auditors shall be supplied with a copy of the annual balance-sheet of the National Housing Bank and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list delivered to them of all books kept by the National Housing Bank and shall at all reasonable times have access to the books, accounts, vouchers and other documents of the National Housing Bank.
(3) The auditors may, in relation to the accounts of the National Housing Bank, examine any director of the Board or any officer
The National Housing Bank shall furnish, from time to time, to the Reserve Bank such information and returns as the Reserve Bank may require.
The National Housing Bank shall make an annual report to the Central Government and the Reserve Bank on the trend and progress of housing in the country and in that report may make such suggestions as it may think necessary or expedient for the development of housing and the Central Government shall, as soon as may be after the report is received by it, cause the same to be laid before each House of Parliament.
(1) The National Housing Bank may appoint such number of officers and other employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service.
(2) The duties and conduct, terms and conditions of service and the establishment and maintenance of provident fund or any other fund for the benefit of the officers and other members of staff of the National Housing Bank shall be such as may be prescribed.
(3) The National Housing Bank may depute any officer or any member of its staff for such period and on such terms and conditions as it may determine, to any institution including a housing finance institution.
(4) Nothing contained in this section shall empower the National Housing Bank to depute any
The Board may, by general or special order, delegate to an officer or officers of the National Housing Bank, subject to such conditions and limitations, if any, as may be specified in the order, such of its powers and duties under this Act as it may deem necessary.]
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1. Ins. by Act 15 of 2000, sec. 22 (w.e.f. 12-6-2000).
(1) The National Housing Bank shall not, except as otherwise required by this Act or any other law, divulge any information relating to, or to the affairs of, its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the National Housing Bank to divulge such information.
(2) Every director, member of a committee, auditor, adviser, officer or other employee of the National Housing Bank or of the Reserve Bank, whose services are utilised by the National Housing Bank under the provisions of this Act, shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act.
1[(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit I
(1) No act or proceeding of the Board or of any committee of the National Housing Bank shall be questioned on the ground merely of the existence of any vacancy in, or defect in the constitution of, the Board or the committee, as the case may be.
(2) No act done by any person acting in good faith as a director of the Board or as a member of a committee of the National Housing Bank shall become invalid merely on the ground that he was disqualified to be a director or that there was any other defect in his appointment.
(1) Where any arrangement entered into by the National Housing Bank with a housing finance institution which is a company provides for the appointment by the National Housing Bank of one or more directors of such housing finance instiution, such provision and any appointment of directors made in pursuance thereof shall be valid and effective notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956) or in any other law for the time being in force or in the memorandum, articles of association or any other instrument relating to that housing finance institution, or any provision regarding share qualification, age limit, number of directorships, removal from office of directors and such like conditions contained in any such law or instrument aforesaid, shall not apply to any director appointed by the National Housing Bank in pursuance of the arrangement as aforesaid.
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No suit or other legal proceeding shall lie against the National Housing Bank or any director or any officer or other employee of the National Housing Bank or any other person authorised by the National Housing Bank to discharge any functions under this Act for any loss or damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or of any other law or provision having the force of law.
(1) Every director shall be indemnified by the National Housing Bank against all losses and expenses incurred by him in, or in relation to, the discharge of his duties, except such as are caused by his own wilful act or default.
(2) A director shall not be responsible for any other director or for any officer or other employee of the National Housing Bank or for any loss or expenses resulting to the National Housing Bank from the insufficiency or deficiency of the value of, or title to, any property or security acquired or taken on behalf of the National Housing Bank or the insolvency or wrongful act of any debtor or any person under obligation to the National Housing Bank or of anything done in good faith in the execution of the duties of his office in relation thereto.
(1) Notwithstanding anything contained in any other law for the time being in force, where a nomination in respect of any deposit, bonds or other securities is made with the National Housing Bank in the prescribed manner, the amount due on such deposits, bonds or securities shall, on the death of the depositor or holder thereof, vest in, and be payable to, the nominee subject to any right, title or interest of any other person to such deposits, bonds or securities.
(2) Any payment made by the National Housing Bank in accordance with the provisions of sub-section (1) shall be a full discharge of its liability in respect of such deposits, bonds or securities.]
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1. Ins. by Act 15 of 2000, sec. 24 (w.e.f. 12-6-2000).
[Rep. by Act 14 of 2001, sec. 141 (w.e.f. 1-4-2001).]
(1) Whoever in any return, balance-sheet, or other document or in any information required or furnished by or under or for the purposes of any provision of this Act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine.
(2) If any person fails to produce any book, account or other document, or to furnish any statement or information which, under the provisions of this Act, it is his duty to produce or furnish, he shall be punishable with fine which may extend to two thousand rupees in respect of each offence and in the case of a continuing failure, with an additional fine which may extend to one hundred rupees for every day during which the failure continues after conviction for the
(1) Where an offence has been committed by a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is a
(1) No court shall take cognizance of any offence punishable under this Act except upon a complaint in writing made by an officer of the National Housing Bank, generally or specially authorised in writing in this behalf by the National Housing Bank, and no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or a court superior thereto shall try any such offence.
(2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), a Magistrate may, if he sees reason so to do, dispense with the personal attendance of the officer of the National Housing Bank filing the complaint but the Magistrate may in his discretion, at any stage of the proceedings, direct the personal attendance of the complainant.
A court imposing fine under the Act may direct that the fine, if realised shall be applied—
(a) firstly in, or towards payment of, the cost of the proceedings, and
(b) secondly for repayment of the deposit to the person to whom repayment of the deposit was to be made, and on such payment, the liability of the housing finance institution to make repayment of the deposit shall, to the extent of the amount paid by the court, stand discharged.]
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1. Subs. by Act 15 of 2000, sec. 26, for section 52 (w.e.f. 12-6-2000).
(1) Notwithstanding anything contained in section 49, if the contravention or default of the nature referred to in section 49 is committed by a housing finance institution which is a company, the National Housing Bank may impose on such institution—
(a) a penalty not exceeding five thousand rupees; or
(b) where the contravention or default is under sub-section (2A) or clause (a) or clause (aa) of sub-section (3) of section 49, a penalty not exceeding five lakh rupees or twice the amount involved in such contravention or default, where the amount is quantifiable, whichever is more; and where such contravention or default is a continuing one, futher penalty which may extend to twenty-five thousand rupees for every day, after the first, during which the contravention or default continues.
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The Bankers’ Books Evidence Act, 1891, shall apply in relation to the National Housing Bank as if it were a bank as defined in section 2 of that Act.
No provision of law relating to the winding up of companies shall apply to the National Housing Bank and the National Housing Bank shall not be placed in liquidation save by order of the Central Government and in such manner as it may direct.
(1) The Central Government may, by notification, make rules to carry out the provisions of this Act.
(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—
(a) qualifications for appointment as a recovery officer under sub-section (1) of section 36D;
(b) the salaries and allowances and other terms and conditions of service of the officers and other employees of the Appellate Tribunal under sub-section (3) of section 36M;
(c) the salaries and allowances and other terms and conditions of service of the Presiding Officers of the Appellate Tribunal under section 36N; and
(d) the procedure for
(1) The Board may, with the previous approval of the Reserve Bank and in consultation with the Central Government, by notification, make regulations not inconsistent with this Act to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such regulations may provide for all or any of the following matters, namely:—
(a) the fees and allowances that may be paid to the directors for attending the meetings of the Board or its committees under sub-section (5) of section 7;
1[(aa) the manner in which directors shall be elected under clause (ca) of sub-section (1) of section 6;]
The enactments specified in the Second Schedule to this Act shall be amended in the manner provided therein and unless otherwise provided in that Schedule, such amendments shall take effect on and from the date or establishment of the National Housing Bank under section 3.
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty:
Provided that no such order shall be made after the expiry of a period of three years from the commencement of this Act.
The First Schedule
[See section 44 (2)]
I,............................., do hereby declare that I will faithfully, truly and to the best of my skill and ability execute and perform the duties required of me as director, member of the..........................committee, auditor, advisor, officer or other employee (as the case may be) of the National Housing Bank and which properly relate to the office or position held by me in or in relation to the said National Housing Bank.
I further declare that I will not communicate or allow to be communicated to any person not legally entitled thereto any information relating to the affairs of the National Housing Bank nor will I allow any such person to inspect or have access to any books or documents belonging to or in the possession of the National Hou
The Second Schedule
(See section 56)
Part I
Amendments to the Reserve Bank of India Act, 1934
(2 of 1934)
Amendments
1. In section 2, after clause (ccc), the following clause shall be inserted, namely:—
“(cccc) National Housing Bank’ means the National Housing Bank established under section 3 of the National Housing Bank Act, 1967;”
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1[The Third Schedule
(See section 16A)
Place..........................
Date..........................
I/We,................................................,hereby declare that in consideration of the assistance sanctioned by the National Housing Bank to me/us at my/our request, as specified in the Annexure hereto, I/We agree that the immovable property specified in the said Annexure shall constitute security of the said assistance and I/We further agree that the dues relating to the assistance mentioned above, shall, on and from the date of these presents, be a charge on the said immovable property.
1. Signed and delivered by
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