trends in housing finance in india

Report on Trendand

Progress of Housingin India

2 0 1 4

83

Report on Trend and Progress of Housing in India 2014

84

1 Current Macro and Micro Economic Condition and Status of Indian Economy

1.1 Global Economy Outlook 91

1.2 Indian Economy 94

1.3 Indian Economy: Prospects for FY 2014-15 96

1.4 NHB RESIDEX: The Residential Property Price Index 97

2 Overview of the Indian Housing Sector

2.1 Importance of Housing 100

2.2 Issues Concerning Housing in India 102

2.3 The Indian Housing Finance Market 103

3 Policy Environment for Housing and Housing Finance

3.1 Concept of Affordable Housing 107

3.2 The Role of Different Agencies towards Affordable Housing 107

3.3 Recent Housing Schemes Implemented by the Government of India 109

3.4 Select State Level Initiatives in Housing 113

4 Role of National Housing Bank

4.1 Role of National Housing Bank 120

4.2 Performance of National Housing Bank (July 01-June 30) 122

4.3 Resource Mobilization 123

4.4 Refinance Operations 125

4.5 Sanctions and Disbursements through Direct Finance 132

4.6 Regulation and Supervision 133

4.7 Promotion and Development 134

4.8 Capacity Building 138

5 Operations and Performance of Housing Finance Institutions

5.1 Number of Housing Finance Companies 141

5.2 Financial Profile of HFCs 142

5.3 Key Performance Indicators of HFCs 143

5.4 Borrowing Profile of HFCs 145

5.5 Public Deposits with HFCs 145

5.6 Asset Profile of HFCs 147

5.7 Disbursements of Housing Loans by HFCs, based on type of Borrowings 148

6 Institutional Performance viz-a-viz Housing Finance

6.1 Categories of Institutions Providing Housing Finance 156

6.2 Scheduled Commercial Banks and their Performance in Housing Finance 156

6.3 The National Co-operative Housing Federation of India 159

6.4 Microfinance Institutions 161

7 Area of Focus: Sustainable Energy Efficient Housing

7.1 Introduction 1627.2 Energy Consumption in Residential Buildings 163

7.3 Towards achieving energy efficiency 164

7.4 Steps taken by National Housing Bank 166

7.5 Benefits to Various Stakeholders Under the Programme 167

7.6 Building Energy Efficiency 167

8 Way Forward 170

85

PageNo.No. Contents

List of Chapters


1 Overview of the World Economic Outlook Projections

2 Quarterly Estimate of GDP at Factor Cost in Q1 (April-June) of 2014-15 (at 2004-05 prices)

3 City-wise Housing Price Index for the quarterApril-June, 2014

4 Estimated Housing Shortage in India : 2012-2017

5 Financial Highlights for the last SixYears

6

7 Total Outstanding Borrowing as on June 30, 2014

8 Refinance Sanctions and Disbursements for the years 2012-13

9 PLI -wise break-up of Cumulative Disbursements as on June 30, 2014

10 Trend in NHB's Refinance Disbursements between 1999 and 2014

11 The tenure-wise breakup of disbursements during 2012-13 and 2013-14

12 Disbursements made during 2013-14 and outstanding as on 30.06.2014 based ontype of interest rate

13 Break-up of refinance disbursements in 2013-14, on the based of size of underlyingindividual housing loans

14 Area-wise trend in Refinance disbursed against the Individual Housing Loansbetween 2009 and 2014.

15 Scheme-wise trend in Disbursements under NHB's Refinance between 2011 and2014

16 Trend in Refinance Disbursements made to different categories of PrimaryLending Institutions between 2009 and 2014

17 Trend in disbursements made by NHB under Energy Efficient Housing RefinanceScheme

18 Trend in allocation and utilization of RHF

19 Allocation and utilization of UHF

20 Trend in Project Finance Disbursements made by NHB between 2002 and 2014

21 NPV subsidy disbussed by NHB between 2009 and 2014, under ISHUP

22 Disbursement of subsidy to PLIs, under 1% Interest Subvention Scheme between2010 and 2013

23 State-wise and income group-wise bifurcation of EWS and LIG loan accountsagainst which the Trust has made the Guarantee cover to MLIs

24 Trend in performance of GJRHFS, since inception

25 Trainings conducted by NHB in 2013-14

26 Trend in Key Financial Indicators of HFCs for the last three years

27 Trend in Performance of Public and Private Ltd. HFCs for the last three years

28 Trend in Performance of Public Deposit accepting HFCs with Non-acceptingHFCs for the last three years

29 Trend in Performance of Sponsored HFCs with other HFCs for the last three years

30 Trend in Composition of Borrowings of HFCs for the last three years

31 Trend in Outstanding Loans & Advances, and Investments of HFCs for the lastthree years

32 Comparison of Housing Loans with Total Loans of HFCs

33 Trend in Disbursements of Housing Loans of HFCs to individuals for the last threeyears Acquisition/Construction of New Houses

Income expenditure and profitability trend in the last four years

86

List of Tables

No. Contents Page No.

92

95

99

100

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142

143

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144145

147

148

150

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34 Trend in Disbursements of Housing Loans by HFCs to Individuals for the last threeyears Upgradation (including major repairs)

35 Trend in Disbursements of Housing Loans by HFCs to Individuals for the last threeyears Acquisition of Old/Existing Houses (Resale)

36 Trend in Total Disbursements of Housing Loans by HFCs to Individuals for the lastthree years

37 Disbursements of Housing Loans by HFCs to Individuals in 2013-14, as perIncome Category

38 Trend in HFCs Housing Loan distursements in different States/UTs, as per Urbanand Rural Categories

39 Trend in Outstanding Housing Loans of SCBs for the last two years

40 Area-wise Outstanding Housing Loans of SCBs, as on March 31, 2013

41 Classification of outstanding Housing Loans of SCBs, as per Rate of Interest

42 Comparison of PSBs Housing Loans for the last two years

43 Trend in Slab-wise Housing Loans of PSBs for the last two years

44 Trend in Borrowings, Sanctions and Disbursements of Apex Cooperative HousingFederations (Cumulative) for the last three years

45 Trend in Housing Loans Disbursed and Units Constructed byACHFs : (State-wise)for the last three years

1 Asia-Changes in Real GDP at Market Prices

2 Inflation rate in India as per Consumers Price Index (CPI)

3 Projection of Growth of Urban Population in India

4 Share of outstanding borrowing of NHB as on June 30, 2014

5 Refinance Sanctions for the years 2012-13 and 2013-14

6 Refinance Disbursements for the years 2012-13 and 2013-14

7 PLI -wise break-up of cumulative disbursements as on June 30, 2014

8 Trend in NHB's refinance disbursements, between 1999 and 2014

9 Trend in refinance disbursements made to different categories of primary lendinginstitutions between 2009 and 2014

10 Trend in performance of GJRHFS, since inception

11 Classification of Registered Housing Finance Companies

12 State/ Union Territory-wise Branches/Offices of Registered HFCs

13 Trend in Outstanding Resources of HFCs for the last three years

14 Trend in OutstandingAssets of HFCs for the last three years

15 Trend in Size-wise Public Deposits of HFCs for the last three years

16 Trend in Interest rate-wise Public Deposits of HFCs for the last three years

17 Trend in Maturity-wise Public Deposits of HFCs for the last three years

18 Trend in Maturity-pattern of Outstanding Housing Loans to Individuals by HFCs

19 Trend in Disbursements of Housing Loans by HFCs for the last three years, basedon Category of the Borrowers.

20 Trend in Disbursements of Housing Loans to Individuals by HFCs for the last

three years, based on purpose of utilization.

List of Graphs


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94

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1 NHB's Financial Performance at a Glance

2A Trend in HFCs Disbursements of Housing Loans to Individuals

3A Trend in HFCs Outstanding Housing Loans to Individuals

2B Trend in HFCs Disbursements of Housing Loans to Builders

3B Trend in HFCs Outstanding Housing Loans to Builders

4 Trend in HFCs Disbursements of Housing Loans Acquisition/ Construction ofNew Houses to Individuals

1 Excerpts from the Economic Survey 2014-15

2 Study on Impact of Investments in the Housing Sector on GDP and Employmentin the Indian Economy

3 Report on "Scaling Up Housing Microfinance" by NHB in collaboration withIFMR Capital and DFID, UK.

4 Announcements related to Housing Sector in the Union Budget 2014-15

5 Grievance Registration and Information Database System (GRIDS)

6 Design Guidelines for Energy-efficient Multi-storey Residential Buildings byBEE -Recommendations on energy-efficiency features for consideration at thedesign stage of multi-storey residential buildings

88

List of Box Items


List of Pictures

Contents Page No.No.

21 Trend in Outstanding Housing Loans of PSBs

22 Trend in Consumption of Electricity in India

23 Sector-wise Consumption of Electricity (Utilities) during 2012-13

24 Future trend of building sector in India

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NHB (ND)/ CMD /3985 /2015April 22, 2015

The Finance SecretaryGovernment of IndiaMinistry of FinanceNorth BlockNew Delhi- 110001

Dear Sir,

In pursuance of provision of Section 42 of National Housing Bank Act, 1987, I havepleasure in transmitting herewith a copy of the 'Report on Trend & Progress ofHousing in India' 2014.

Yours faithfully,

(Mohammad Mustafa)Encl: As above

Letter of Transmittal

Wholly owned by 5th Floor, Core 5-A, India Habitat Centre, Lodhi Road, New Delhi-110003Reserve Bank of India Phone: (D) 011-2464 2722 (PBX) 011-2464 9031-35 Fax : 011-2464 9030

Gram : NIWAS Bank email : @nhb.org.inmd.mustafa

Hkkjrh; fjtoZ cSad dksj 5&, bafM;k gSfcVsV lsaVj] yks/kh jksM+] ubZ fnYyh&110003ds laiw.kZ LokfeRo esa nwjHkk"k ¼lh½ 011&2464 2722 ¼ihch,Dl½ 011&2464 9031&35 QSDl % 011&2464 9030

rkj % fuokl cSad bZ&esy % [email protected]

ÞcSad fgUnh esa i=kpkj dk Lokxr djrk gSß

89

Mohammad MustafaChairman & Managing Director

eks- eqLrQkv/;{k ,oa izcU/k funs'kd


NHB (ND)/ CMD /3986 /2015April 22, 2015

The GovernorReserve Bank of IndiaCentral Office BuildingShahid Bhagat Singh MargMumbai - 400 001

Dear Sir,

In pursuance of provision of Section 42 of National Housing Bank Act, 1987, I havepleasure in transmitting herewith a copy of the 'Report on Trend & Progress ofHousing in India' 2014.

Yours faithfully,

(Mohammad Mustafa)Encl: As above

Letter of Transmittal

Mohammad MustafaChairman & Managing Director

eks- eqLrQkv/;{k ,oa izcU/k funs'kd

ÞcSad fgUnh esa i=kpkj dk Lokxr djrk gSß

90

Wholly owned by 5th Floor, Core 5-A, India Habitat Centre, Lodhi Road, New Delhi-110003Reserve Bank of India Phone: (D) 011-2464 2722 (PBX) 011-2464 9031-35 Fax : 011-2464 9030

Gram : NIWAS Bank email : @nhb.org.inmd.mustafa

Hkkjrh; fjtoZ cSad dksj 5&, bafM;k gSfcVsV lsaVj] yks/kh jksM+] ubZ fnYyh&110003ds laiw.kZ LokfeRo esa nwjHkk"k ¼lh½ 011&2464 2722 ¼ihch,Dl½ 011&2464 9031&35 QSDl % 011&2464 9030

rkj % fuokl cSad bZ&esy % [email protected]

Current Macro and Micro Economic Conditionand Status of Indian Economy

Chapter 1

91

1.1 Global Economy Outlook

1.1.1 Global activity has broadly strengthened and is expected to improve further in 2014-15, with muchof the impetus coming from advanced economies. Inflation in these economies, however, hasundershot 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 theprevious six months. Advanced economies accounted for much of the pick-up, whereas growth inemerging markets increased only modestly . The strengthening in activity was mirrored in globaltrade and industrial production. The latest data suggest a slight moderation in global growth in thefirst half of 2014. The stronger-than-expected acceleration in global activity in the latter part of2013 was partly driven by increase in inventory accumulation that will be reversed.

1.1.3 Emerging market and developing economies (EMDEs), witnessed inflationary pressures drivenby a weaker exchange rate and domestic supply side factors. Many central banks in EMDEs werefaced with the trade-off arising from a combination of slowing economic growth and stubborninflationary pressures. In view of high inflation and exchange rate depreciation, many centralbanks 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 astrengthening economic recovery. The European Central Bank (ECB) introduced negative depositrate to encourage bank lending for business activity. Global commodity prices continued to softenamid improved supply and weak demand conditions in 2013-14. Global crude oil prices witnessedsome uptick during H1 of 2013-14 driven by supply outages but declined in H2 of 2013-14 onaccount of easing supply concerns and tepid demand conditions .

1.1.4 In emerging market and developing economies, growth picked up slightly in the second half of2013 due to increase in exports, lifted by stronger activity in advanced economies. But the

1

2

1

2

World Economic Outlook April 2014

Reserve Bank of India Annual Report 2013-14

000

Graph 1 : Asia-Changes in Real GDP at Market Prices (in percent)

1. ASEAN includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam2. India's GDP is at factor cost


92

investment weakness continued, and external funding and domestic financial conditionsincreasingly tightened. Supply-side and other structural constraints on investment and potentialoutput (for example, infrastructure bottlenecks) are issues in some economies. These offsettingforces are expected to remain in effect through much of 2014. Overall, however, emerging market anddeveloping economies continue to contribute more than two-thirds of global growth, and their growthis projected to increase from4.7 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 conditionsacross Asia have remained broadly conducive. Domestic credit growth and corporate bondissuances have been strong indeed, corporate leverage for the region as a whole has risen, ascompanies tried to take advantage of the still favorable global liquidity conditions.Activity acrossAsia picked up in the second half of 2013. GDP growth improved across most of the region duringthe past year, and recent high-frequency indicators, while somewhat mixed, point to a solidexpansion continuing into 2014 .

3

3IMF Regional Outlook (Asia), April 2014

Table 1 -

Difference from

Published

Q4 over Q4

Projections Estimates Projections

2012 2013 2014 2015 2014 2015 2013 2014 2015

October 2013 WEO

World Output 1 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

Euro Area –0.7 –0.4 1.0 1.4 0.1 0.1 0.5 1.2 1.5

Germany 0.9 0.5 1.6 1.4 0.2 0.1 1.6 1.3 1.4

France 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

India 2 3.2 4.4 5.4 6.4 0.2 0.1 4.6 5.5 7.0

ASEAN-5 3 6.2 5.0 5.1 5.6 –0.3 0.0 4.0 5.6 5.6

Year over Year

Estimates

World Economic Outlook ProjectionsOverview of the (Percent change unless noted otherwise)

93

Note: Real effective exchange rates are assumed to remain constant at the levels prevailing duringNovember 11-December 9, 2013. When economies are not listed alphabetically, they are ordered on thebasis of economic size. The aggregated quarterly data are seasonally adjusted.

1. The quarterly data and projections account for 90 percent of the world ppp weights and around 80percent of the emerging market and developing economies.

2. For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDPat market prices. Corresponding growth forecasts for GDP at factor cost are 4.6, 5.4, and 6.4 percentfor 2013, 2014, and 2015, respectively.

3. Indonesia, Malaysia, Philippines, Thailand, and Vietnam.4. 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 futuresmarkets is $103.84 in 2014 and $98.47 in 2015.

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

Memorandum

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 . . . . . . . . .

Imports (goods and

services)

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 . . . . . . . . .

Commodity Prices (U.S.

dollars)

Oil 4 1.0 –0.9 –0.3 –5.2 2.8 0.8 2.7 –2.7 –5.3

Nonfuel (average based on

world commodity export

weights)

–10.0 –1.5 –6.1 –2.4 –2.0 –0.3 –3.8 –4.6 –1.8

Consumer Prices

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

London Interbank Offered

Rate (percent)

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 . . . . . . . . .

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


94

1.2 Indian Economy

1.2.1 The Indian economy weathered the global financial crisis rather well and quickly recovered fromthe decline in growth rate in 2008-09 to a healthy growth that averaged around 9 per cent annuallyin 2009-10 and 2010-11. However, Indian economy went through challenging times being part ofthe global economy with its exports and imports amounting to 43 percent of GDP and two-wayexternal sector transactions amounting to 108 percent of GDP. The GDP went down to 4.5% in2012-13 and 4.7% in 2013-14 and could be attributed to domestic and external factors such ascyclical down turn with global contractionary headwinds, elevated current account deficit,macroeconomic imbalance, persistent inflation, and the need for a sustainable policy. Theeconomy in 2013-14 has faced rather turbulent times emanating from exchange rate pressuresamid capital outflows, persistence of near double digit inflation, fiscal imbalances and a decline ininvestment.

1.2.2 In 2013-14, the agriculture sector's rebound to an above trend growth rate on the back of a normalmonsoon, supported overall growth. The industrial sector contracted, while services sector growthremained unchanged at the previous year's level. Structural impediments, high inflation anddomestic policy uncertainties continued to weigh down growth prospects. A series of financialturbulence across the globe coupled with rising crude prices caused capital outflows and exertedpressure on the exchange rates, with the Indian economy more or less typifying the 'fragile' EMEbasket for the first half of FY 2013-14. It was observed that a low overall growth reflectedcontracting fixed investment and slowing consumption, though there was an improvement inexport growth aided by rupee depreciation and contraction in imports due to subdued demandconditions 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 Indiaaveraged 9.49 percent from 2012 until 2014, reaching an all-time high of 11.16 percent inNovember of 2013 and a record low of 7.31 percent in June of 2014. The moderation in consumerprice inflation resulted from a sharp correction in food prices. However, the disinflationarymomentum has not gathered strength as decline in food prices was temporary and second roundeffects from high food inflation continue to exert pressures on the general price level. CPIexcluding food and fuel inflation showed considerable persistence at an elevated level during H1of 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

10

8

6

4

2

0

CPI (General)

7.318.28

8.59

8.318.03

8.799.87

11.16

Nov

/13

Dec

/13

Jan/

14Fe

b/14

Mar

ch/1

4A

pril/

14M

ay/1

4Ju

ne/1

4

95

April - June, 2014 (Q1)

2012 -13 2013 -14 2014 -15 2013 -14 2014 -15

Agriculture, forestry &

fishing

1,77,947 1,85,084 1,92,115 4.0 3.8

Mining & quarrying 26,519 25,490 26,016 - 3.9 2.1

Manufacturing 2,08,756 2,06,340 2,13,470 - 1.2 3.5

Electricity, gas & water

supply

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

GDP at factor cost 13,00,221 13,60,757 14,38,488 4.7 5.7

Industry

and further to 7.4 per cent in July 2014. This decline in a component that has exhibited stickinesswas supported by a tight monetary policy stance. Going forward, while growth revival on asustainable 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 onethrough greater political stability and a supportive policy framework. The strong policy measurestaken 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 persistentinflation, fiscal imbalances, bottlenecks to investment, and inefficiencies that require structuralreform still persist. The Indian economy expanded at its fastest pace in two-and-a-half years in thequarter ending June 2014 on the back of a turnaround in manufacturing. Quarterly GDP at factorcost 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 year . The growth in the performance of exports (that registered a growth of11.5 per cent at 2004 - 05 prices), along with the measures taken by the Government, the economycan be expected to show further improvement in the remaining part of 2014 - 15.

`

`4

Table 2: Quarterly Estimate of GDPat Factor Cost in Q1 (April-June) of 2014-15 (at 2004-05 prices)

4MosPl- Estimates of Gross Domestic Product for the first quarter (April-June) 2014-15


Gross Domestic Product

for Q1 (Amount in crore)`

Growth to over

previous year Q1(in percent)


96

1.2.5 The Reserve Bank of India and the Government will need to exercise caution during 2014-15 sothat 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 ofindustry, services, international trade, labour markets, public sector management, financialmarkets and competition are needed to work towards improving activity levels and productivity,thus shaping improved supply responses that can help enhance the growth potential. Thisapproach can help in hoping for a sustainable growth of at least 7 per cent in a non-inflationarymanner once global growth normalizes.

1.2.6 The financial sector especially the Public Sector Banks need to review their governance structureand market discipline to contain the level of NPAs as percentage of Gross Advances. As per RBI'sFinancial Stability Report (FSR), June 2014 , India's financial system remains stable, though thebanking 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 recentweakening of the rupee should spur exports. Export growth is also expected to pick up as theadvanced economies consolidate their growth momentum.

1.3.1 As per the Economic Survey 2014-15 , the Indian economy is poised to overcome the sub-5 percent growth of gross domestic product (GDP) witnessed over the last two years. The growthslowdown 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, owingprimarily to the elevated level of food inflation. Yet, the developments on the macro stabilizationfront, particularly the dramatic improvement in the external economic situation with the currentaccount deficit (CAD) declining to manageable levels after two years of worryingly high levelswas the redeeming feature of 2013-14. The fiscal deficit of the Centre as a proportion of GDP alsodeclined for the second year in a row as per the announced medium term policy stance. Reflectingthe 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 ofinvestors, and with the global economy expected to recover moderately, particularly on account ofperformance in some advanced economies, the economy can look forward to better growthprospects 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, liquidityand credit conditions, with tangible efforts to improve resource flow to productive sectors. Thelatter includes cuts in statutory liquidity ratio (SLR) and exemptions from regulatory pre-emptionssuch as cash reserve ratio (CRR), SLR and priority sector lending (PSL) for issuing long-termbonds 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 foreignexchange reserves that helps insulate the economy against prospective shocks that may betransmitted onshore. The spike in global oil price following the civil war in Iraq was transitory andthe oil prices seem to be stable. Overall, the exchange rate has been stable so far in 2014-15.

5

6

1.3 Indian Economy: Prospects for FY2014-15

5

6

RBI's Financial Stability Report (FSR) June 2014

The Economic Survey 2014–15 by Ministry of Finance, Government of India

97

Fiscal Deficit

Growth

Inflation

Balance of Payments

Subsidies

Taxation

Forex Market

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India needs sharp fiscal correctionNeed for subsidy reforms for fiscal consolidationRecommends raising tax-to-GDP ratio for fiscal consolidationShortfall in revenues can be contained through better mobilization and reformsExternal debt remains within manageable limits

GDP growth seen at 5.4-5.9 percent in 2014-15Economic growth of 7-8 percent not seen before 2016-17Downward risk to economic growth due to poor monsoon, external factors

Government needs to move towards low and stable inflation through fiscal consolidationWholesale Price Index (WPI) inflation expected to moderate by end-2014Consumer Price Index (CPI) inflation showing signs of moderationNeed to create a competitive national market for food

Improvement in balance of payments position during late 2013-14 was due to import restrictions andeconomic slowdownNeed to adjust to advanced economies' event exit from accommodative monetary policy stance

Rationalization of subsidies such as fertilizer and food essentialNeed to shift subsidy programme from price subsidies to income support

Government needs to move towards simple tax regime, fewer tax exemptions, single rate of goods andservices tax (GST)GST to play vital role in indirect tax reform

Intervention in forex market by Reserve Bank of India is behind accumulation of reserves generally

1.4 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 physicaland financial assets and its contribution in overall national wealth, a need was felt for setting up of amechanism, which could track the movement of prices in the residential housing segment. NationalHousing Bank, at the behest of the Ministry of Finance, undertook a pilot study to examine the feasibilityof 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


Box 1 : Excerpts from the Economic Survey 2014-15


98

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-makingby enabling comparisons over time and across cities and localities based on the emerging trends. TheRESIDEX also provides insights into the property market for the lending agencies in their creditevaluation and assessment of the value (present and potential) of the security against the loan. NHBRESIDEX can be a useful indicator for estimating the value of property to be financed and also forassessing the value of security cover on the outstanding loan. Builders and developers may also benefitfrom the index by assessing the demand scenario in a locality, and mapping the housing needs in differentparts 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 beingdone since 2007. The latest NHB RESIDEX for the quarter April - June, 2014 covers 26 cities,with baseyear as 2007.

The RESIDEX for the quarter April-June, 2014 constructed for 26 cities has taken into account the pricetrends for residential properties in different locations and zones in each city and is based upon thetransaction data received from Central Registry of Securitization Asset Reconstruction and SecurityInterest of India (CERSAI). The data based on actual transactions are put through a Model that depictsthe trend in the market. The RESIDEX is expected to bring greater uniformity and standardization aswell as greater transparency in the valuation of properties across the industry.

The movement in prices of residentialproperties for the quarter April-June, 2014 has shown marginal increasing trend in eighteen (18) citiesranging from 0.5% in Bhubaneswar to 3.9% in Pune, and fall in six (6) cities ranging from 0.5% inLucknow to 4.4% in Chandigarh in comparison to the previous quarter January-March, 2014. Indices for2 cities namely Hyderabad and Raipur have remained stable.

Residential housing prices in 18 cities have shown increase in prices in this quarter endedJune, 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%).

6 cities have shown decline in prices over the previous quarter with maximum fallobserved 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.

1.4.1 Price Movement for the quarterApril-June, 2014 (26 Cities) :

1.4.2 Rising Trend:

1.4.3 Declining Trend:

99

Table 3: City-wise Housing Price Index for the Quarter April-June, 2014


CITIES

Index

Jan -

Mar

Index

Oct-

Dec

Index

Jan -

Mar

Index

Apr-

Jun

Index

July-

Sep

Index

Oct-

Dec

Index

Jan -

March

Index

April-

June

Index

Hyderabad 100 86 85 84 90 88 84 88 93 95 95

Faridabad 100 217 217 216 205 207 202 204 209 209 211

Patna 100 129 140 138 151 152 147 150 159 150 154

Ahmedabad 100 164 174 180 191 192 186 191 197 209 213

Chennai 100 304 309 312 314 310 303 318 330 349 355

Jaipur 100 80 78 85 87 112 110 108 105 101 102

Lucknow 100 164 171 175 189 183 187 191 185 194 193

Pune 100 181 200 201 205 221 219 219 235 232 241

Surat 100 144 145 138 150 140 142 145 154 165 161

Kochi 100 72

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

2013 2014 20142007 2012

Apr-

Jun

Index

2012

Jul-

Sep

Index

2012 2012 2013 2013 2013

73 80 87 89 86 86 85 8685


100

2.1 Importance of Housing

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

2.1.1 Housing, a basic human need, has always had and continues to have major socio-economicimplications and assumes a crucial role as it contributes significantly to the national economy andnation building. The need for adequate shelter for all along with basic services is more urgent thanever, 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 ineconomic, social, and civic development. In importance, it is third after food and clothing. A hostof vocations and professions directly or indirectly derive their livelihoods from housing whichinclude construction workers, builders, developers, suppliers, civil engineers, valuers, furnishers,interior decorators, and plumbers. Further, indirect impact of housing is in terms of improvedhabitat, living, educational, social and cultural standards leading to human capital formation andincome capabilities. Housing is integrally related to a host of outcomes for the society morebroadly beyond those that are financial or material. Quality housing can facilitate psychologicaland 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 economicdevelopment. More importantly, housing lays the foundation for a life of dignity. By investing inhomes, people, in particular, the low-income groups accumulate equity that can then be used ascollateral, making them more credit-worthy for accessing finance through normal channels andalso for generating income.

2.1.4 Census 2011 figures reveal that the housing stock has increased form 24.9 crore in 2001 to 33.1crore 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 whoneed 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 areashave about 90% shortage in below poverty line category.

Source : * Urban Housing Shortage (2012-17) Report of the Ministry of Housing & Urban Poverty Alleviation to estimate theUrban Housing Shortage for the 12th Five Year (2012-17)

** Working Group Report on Rural Housing for 12th Five Year Plan (2012-17)

Overview of the Indian Housing SectorChapter 2

Percentageto Total

Shortage(in million)

CategoryPercentageto Total

Shortage(in million)

Category

Urban Housing* Rural Housing**

Economically Weaker

Sections (EWS)

Lower Income Group

(LIG)

Middle Income Group

(MIG)

Total

10.55

7.41

0.82

18.78

56.18

39.44

4.38

100.00

Below PovertyLine (BPL)

Above PovertyLine (APL)

39.30

4.37

43.67

90.00

10.00

100.00

101

2.1.6 The number of metropolitan cities with population of 1 million and above has increased from 35 in2001 to 50 in 2011 and is expected to increase further to 87 by 2031 . The expanding size of Indiancities will happen in many cases through a process of peripheral expansion, with smallermunicipalities and large villages surrounding the core city becoming part of the large metropolitanarea. The urbanization trend is going to have fundamental impact on the political, economical andsocial situations of the country. Critical issues in urbanization include lack of basic infrastructuresuch as roads, sanitation and drinking water systems, transport, affordable housing, slums andsquatters, internal migration and inclusive cities. Thus, there is a need to create safe, secure andaffordable housing for the urban masses for the growth and development of the country and tocreate a more inclusive society. It is felt that, addressing housing shortage and improvingaffordability is an integral part of the policy measures towards sustainable urban development. Inorder to improve the quality of life, it is of critical significance that the housing stock is improvedthrough urban renewal, in situ slum improvement and development of new housing stock inexisting 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 housinginvestment 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 housinginvestment, may compromise the stability and the health of the national economy.

2.1.8 Granger causality analysis through statistical hypothesis test has confirmed the interactionbetween housing investment and economic growth as well as that between non-housinginvestment and economic growth. It has been found that housing investment has a stronger shortrun effect on economic growth than non-housing investment. It has also been found that housinginvestment has a long run effect on economic growth while economic growth has a long run effecton both housing and non-housing investment. The findings suggest that housing investment is an

8

7

8

India Urbanization Econometric Model; McKinsey Global Institute analysis

Report on Indian Urban Infrastructure and Services

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 sayingwas that "India lives in its villages". But now this has begun to change. Though the bulk of thepopulation might still remain in villages, the urban population content is rising. The urbanpopulation of India is likely to grow from 285.3 million in 2001 to 533 million in 2025, as per theprojections based on past trends. Studies project that by 2030, the total urban population of Indiawill be 590 million i.e. 40 per cent of the Indian population would live in urban areas . Theprojected growth is shown in the graph below.

7

Graph 3: Projection of Growth of Urban Population in India

Urban Population

Total Population

1600

1400

1200

1000

800

600

400

200

01991 2001 2008 2030

(in m

illi

on)


102

important factor contributing to short-term fluctuations of economic growth, with its growthstimulating 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 wasnot because of the fact that house-building industry was a major employer with large multipliereffects but also due to the fact that housing was increasingly seen to have social consequenceswith diverse economic effects. The contribution and use of decent housing affects economicgrowth and economic development through its impact on employment, savings, investment andlabour productivity in a positive manner.

Box 2: Study on Impact of Investments in the Housing Sector on GDP and Employment inthe Indian Economy

National Council of Applied Economic Research (NCAER) launched the Report in April 2014 on theStudy 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 residentialconstruction, non-residential construction and other construction sector and the residential constructionsector is treated as housing sector.

The key findings in the Report, include -

a. The residential construction (housing sector) accounts for

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 2.34and 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) arecreated in the economy. With induced effect, the number of jobs created would be 4.06 (3.95informal and 0.11 formal).

f. For every investment in the housing sector, the household income increases by 0.41. Withinduced 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 withhousehold 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.

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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.

103


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.

2.3.1 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

2.3 The Indian Housing Finance Market


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 year-

on-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


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.

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-à-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 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' non-

performing assets (NPAs) from the current levels. However, overall, the gross NPA percentage is

expected to remain around range over the medium term.

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.

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.

major function is not the provision of housing finance

and they maintain low profile.

asset

Commercial Banks

Housing Finance Companies

Cooperative Banks

Regional Rural Banks

Agricultural and Rural Development Bank's

105


106

The Bank collaborated with IFMR Capital and DFID UK to carry a study on "Scaling up of HousingMicrofinance in India" with the objective of evaluating NHB's housing microfinance programme andstudying the savings pattern of select informal sector households. Further, the study endeavored to developa savings-linked housing finance product and understand the potential of the SHG-Bank Linkage model fora housing finance product. The study examined microfinance institutions and non-governmentorganizations working in the area of housing microfinance in ten states.

Major Recommendations of the Study, include -

In order to enable continuous and dependable flow of finance for wholesale financing of housingmicrofinance, the funding model proposed in this study is based on the principles of incentivealignment and active risk management.

It is imperative that for the purpose of ensuring an efficient system design for housing microfinance, astructure 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 NHBprovides a second loss protection in the form of a guarantee is much required. The idea is to partnerwith a forward looking bank and demonstrate a model of funding which can then be replicated infuture by other guarantee agencies partly replacing the NHB in its role as the second loss provider inthe structure.

Significant support from NHB would be required to train the NGO-MFI staff on helping their clientsin 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 thebanks retain risk over and above the first loss provided by the NGO-MFI and second loss from theNHB.

NHB should also consider continuing its focus on capacity building specifically targeting NGO-MFIsfor this purpose. Assistance in the form of imparting skills required for originating housing loans as adeparture from the conventional group liability product would be key in ensuring that the NGO-MFIsoriginate 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 butwould also unlock a huge market which currently is served by the informal sources of finance. Inaddition, the housing finance companies will have a larger market of properties with good title tofinance.

The NHB has a large mandate and may not be able to keep a strong operational control on awidespread program. It may consider the role of piloting and demonstrating the model suggestedabove 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 pushimprovement. In scaling up the housing microfinance program, NHB can consider partnering withmarket participants, such that NHB plays the role of a facilitator and enabler.

a) Wholesale Financing- Funding Model

b) Role of the National Housing Bank

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Box 3: Report on "Scaling Up Housing Microfinance" by NHB in collaboration with IFMRCapital and DFID, UK.

107

Policy Environment for Housing andHousing Finance

Chapter 3

3.1 Concept ofAffordable Housing

3.2 The Role of DifferentAgencies towardsAffordable Housing

3.2.1 Role of Central Government:

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3.1.1 Affordable housing refers to housing units that are affordable by that section of society whoseincome is below the median household income. Though different countries have differentdefinitions for affordable housing, but it is largely the same, i.e. affordable housing should addressthe housing needs of the lower or middle income households. Affordable housing becomes a keyissue especially in developing nations where a majority of the population is unable to buy houses atthe market price. Disposable income of the people remains the primary factor in determining theaffordability. As a result, it becomes the increased responsibility of the Government to cater to therising demand for affordable housing. The Government of India has taken various measures tomeet the increased demand for affordable housing including stressing on Public-PrivatePartnerships (PPP) for development of these units.

3.1.2 The need to facilitate supply of affordable housing to the unserved population and to encouragebroad 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 termsof 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'sfocus through various housing policies is to increase housing stock and providelow cost housing finance to the under served and unserved. Housing has been an important subjectin the Five Year Plans and specific Schemes such as Indira Awas Yojna, Golden Jubilee RuralHousing Finance Scheme, etc. and funds such as Rural Housing Fund, Urban Housing Fund, etc.have been formulated/created in order to promote affordable housing.

The National Urban Housing & Habitat Policy 2007 (NUHHP-2007) seeks to promote various types of Public-Private Partnerships for realizing the goal of"Affordable Housing forAll" with special emphasis on the urban poor. Given the magnitude of thehousing shortage and budgetary constraints of both the Central and State Governments, theNUHHP, 2007 focuses the spotlight on multiple stake-holders. Specific roles have been envisagedunder the policy for various stakeholders, which are as under:

To play a role of enabler and facilitator and ensure that private sector is enthused to take upaffordable housing projects.

To advise and guide respective State Governments to adopt and implement the National UrbanHousing & Habitat Policy in a time bound manner.

To promote balanced regional development in the country by suitably decentralizing functionsrelating 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 groupsserviced by basic amenities.

schemes and funds


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 ofphysical, social and economic services.

To develop suitable fiscal concessions in collaboration with the Ministry of Finance for promotionof housing and urban infrastructure with special focus on EWS/LIG beneficiaries.

To prepare the State Urban Housing and Habitat Policy.

To ensure suitable flow of financial resources to potential EWS/LIG beneficiaries as well asundertake viability gap funding of large housing and habitat development projects.

To prepare medium term and long term strategies for tackling problems relating to provision ofadequate water supply, drainage, sewerage, sanitation, solid waste management, power supply andtransport 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 andthe State level Regional Plan by respective agencies with provision of adequate land for urbanpoor.

To promote well designed Public-Private Partnerships for undertaking housing and infrastructureprojects.

To act as a facilitator and enabler in collaboration with ULBs/Parastatals/ Private SectorCooperative Sector / Non-Government Organizations (NGOs) with regard to Integrated SlumDevelopment Projects as well as Integrated Township Development Projects.

To encourage Cooperative Group Housing Societies, Employees Organizations, labour housingpromotion organization, NGOs and Community Based Organizations (CBOs) to havePartnerships with Urban Local Bodies / Parastatals in relation to housing related micro-financeand housing development.

To reassess their strategies with a view to make them more inclusive in terms of EWS and LIGsegments

To promote innovative financial instruments

To enhance/ strengthen the income spread of housing loans portfolio to increasingly cover BPLand 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 insurancecover.

To plough part of their resources towards financing slum improvement and up-gradationprogrammes.

To devise innovative housing finance schemes for targeting the EWS and LIG segments, withsuitable subsidy support from the Government.

To promote MFIs and SHGs for mobilizing savings and play a significant role in housing financesector.

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3.2.2 Roles of State Governments:

3.2.3 RolesofFinancialInstitutions:

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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 developmentprojects 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 RajivRinnYojana have further strengthened the sector.

3.3.2 The recent budget announcements related to housing sector have been encouraging. An allocationof 8,000 crore to support rural housing and 4,000 crore for affordable housing to the

NHB, will increase the flow of cheaper credit for housing.Further, the Government has mandated to provide 'Housing for All by 2022'. With this objectivethe Hon'ble Finance Minister in his Budget Speech announced the setting up of a Mission on LowCostAffordable Housing, which will be anchored by the National Housing Bank. The scheme willincentivize 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 opportunitiesthrough Rental, Affordable and Senior Citizen Housing projects that can increase the depth of theindustry. REITS have been successfully used as instruments for pooling of investment in severalcountries and such instruments will definitely attract long term finance from foreign and domesticsources including the NRIs. REITs would reduce the pressure on the banking system while alsomaking available fresh equity.

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Allocation for National Housing Bank increased from 6,000 to 8,000 crore to support Ruralhousing.

4,000 crore allocated to NHB from the priority sector lending shortfall with a view to increase theflow 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 ownhouses.

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 toencourage 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 becompleted. Development of industrial corridors with emphasis on Smart Cities linked to transportconnectivity 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 SmartCities'

Incentives for Real Estate Investment Trusts (REITS), complete pass through for the purpose oftaxation and a modified REITS type structure for infrastructure projects as the InfrastructureInvestment Trusts (InvITs), may attract long term finance from foreign and domestic sourcesincluding the NRIs.

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Chapter-3 Policy Environment for Housing and Housing Finance

Box 4: Announcements related to Housing Sector in the Union Budget 2014-15

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3.3.4.1 The National Urban Housing & Habitat Policy, 2007 strives to promote equitabledistribution of land, shelter, and services by promoting "various types of public-privatepartnerships for realizing the goal of affordable housing for all"

3.3.4.2 The Jawaharlal Nehru National Urban Renewal Mission (JNNURM), a CentralGovernment Program launched in collaboration with various State Governments andUrban Local Bodies, supports 63 cities across the country. The focus of the programme ison improving efficiency in urban infrastructure services delivery mechanism, communityparticipation and accountability of Urban Local Bodies. The Bharat Nirman programme,launched in 2005, is continuing its focus on the provision of basic amenities like drinkingwater, roads, irrigation facilities, electricity and the construction of houses in rural areasthrough its six flagship programmes.

3.3.4.3 The Indira Awas Yojana (IAY) is focused on the provision of cash subsidy to rural BPLfamilies for construction of dwelling units using their own design and technology. Thefunding under the Scheme is provided by the Centre and State in the ratio of 75:25respectively.

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 Indiaimplemented Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) onDecember 26, 2008 to provide home loan to EWS/LIG persons foracquisition/construction of house. The Scheme provided a subsidy of 5% for a loanamount up to 1 lakh for the entire tenure of loan on an upfront basis. The Central NodalAgencies (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 RajivRinn Yojana (RRY), as an additional instrument for addressing the housing needs ofEWS/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, theamount 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 forboth categories of beneficiaries. The eligible lending institutions under the scheme areSCBs, 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 averageannual income up to 1,00,000/- and the economic parameter of LIG is defined ashouseholds 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 totime.

3.3.4.6 1% Interest Subvention Scheme: In order to stimulate demand for credit for housing in thelower & 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% forone year (first 12 months) on all individual housing loans upto 10 lakh, provided the costof the unit does not exceed 20 lakh, which continued till FY 2010-11. The Scheme wasfurther extended for FY 2011-12 and FY 2012-13 with increase in limit of housing loansupto 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 2013. The loans provided by the

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3.3.4 The major policies/schemes implemented by the Central Government in housing are asoutlined below:

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lending institutions upto March 2013 were/are eligible for the interest subsidy underthe Scheme. All regions of the States and Union Territories in the country, including ruraland 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 designatedas Nodal agencies for SCBs and HFCs, respectively. NHB was designated as the solenodal agency for SCBs and HFCs from FY2011-12.

3.3.4.7 The Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) has beenset up and registered by Government of India on May 01, 2012 under the aegis of theGovernment 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" ofthe Trust.

The Trust has an initial Corpus Fund of 1 lakh contributed by the Settler. Furthercontribution 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 bythe Settler and 200 crore by the State Governments.

As on June 30, 2014, MoHUPA, as Settler, has contributed 150 crore towards the corpusfund of the Trust. Credit Risk Guarantee Fund Scheme (CRGFS) for low income housinghas 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 thelending institutions without any collateral security and/or third party guarantee to the newborrowers in the EWS/LIG categories in urban areas for home improvement/acquisitionand purchase of new or second hand dwelling unit/construction/extension of anaffordable dwelling unit with carpet area not exceeding 430 sq.ft. (40 sq.m.). Theguarantee cover available under the Scheme is to the extent of 90% of the sanctionedhousing loan amount upto 2 lakh and 85% for loan amounts above 2 lakh and upto 5lakh. The lending institutions eligible to avail benefit of the Guarantee cover under theScheme of the Fund Trust are SCBs, RRBs, UCBs, NBFC-MFIs, Apex CooperativeHousing Finance Societies registered under the State Co-operative SocietiesAct and HFIsregistered with NHB. As on June 30, 2014, 47 institutions have signed Memorandum ofUnderstanding (MoU) with the Trust under the Scheme.

The major objective of the Trust is to guarantee housing loan up to 5 lakh sanctioned anddisbursed by the lending institutions without any collateral security and/or third partyguarantee to the new borrowers in the EWS/LIG categories in urban areas. Therefore, itwill act as a risk mitigant for lending institutions (Members of the Scheme) and will helpincreasing the scope of lending by Member Lending Institutions (MLIs) for low incomehousing for EWS/LIG segments.

The housing loans provided by MLIs to these segments which are covered under theCRGFS, entails them of certain benefits under prudential norms e.g. Zero Risk Weight, noNPA 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 intendedbeneficiaries under the Scheme helping EWS/LIG borrowers in acquiring/construction ofaffordable housing units.

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Further, the Scheme is applicable for the eligible housing loans extended by the lendinginstitution in urban areas. The coverage under urban areas may extend to statutory towns,urban agglomerations and planning areas. The descriptions of statutory towns, urbanagglomerations and planning areas are given below:

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3.3.4.9CERSAI): 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 underthe SARFAESIAct, 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 overproperty rights to secure loans and advances granted by banks and financial institutions.Availability of encumbrance status, inter alia, help in preventing frauds involving cases whereloans are taken from different lenders against the same property by creating multiple mortgages bydeposit of title deeds as well as fraudulent sale of property without disclosing the security interestover such property.

Central Registry of Securitization Asset Reconstruction and Security Interest of India(

Place with a municipality, corporation, cantonment board or notified town areacommittee, etc., of urban unit is known as Statutory Town. These towns are notified under law bythe concerned State/UT Government and have local bodies like Municipal Corporations,Municipalities, Municipal Committees, etc., irrespective of their demographic characteristics asreckoned on December 31, 2009, Examples: Vadodara, Shimla etc.

means a planning area or a development area or a local planning area or a regionaldevelopment plan area, by whatever name called, or any other area specified as such by theappropriate Government or any competent authority and includes any area designated by theappropriate Government or the competent authority to be a planning area for future planneddevelopment, under the law relating to Town and Country Planning for the time being in force.

is a continuous urban spread constituting a town and its adjoiningoutgrowths (OGs), or two or more physically contiguous towns together with or withoutoutgrowths of such towns. An Urban Agglomeration must consist of at least a statutory town andits total population (i.e. all the constituents put together) should not be less than 20,000 as per the2001 Census. In varying local conditions, there were similar other combinations which have beentreated as urban agglomerations satisfying the basic condition of contiguity. Examples: GreaterMumbai UA, Delhi UA, etc.

3.3.4.8 Capital Subsidy Scheme for Installation of Solar Water Heating and Solar Lighting Systems inHomes

With a view to promote the use of solar energy in the domestic context, the Ministry of New andRenewable Energy (MNRE), Government of India, is implementing a capital subsidy scheme,under its Jawaharlal Nehru National Solar Mission (JNNSM). The Scheme aims at popularizingthe use of solar water heating and solar lighting systems in homes by offering suitable incentives inthe form of capital subsidies for purchase and installation of the solar systems. NHB has beendesignated 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, 2014are eligible to be covered under the Scheme. The Scheme will be valid till December 31, 2015, orsuch 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 heatingsystems [subject to max. of 500 lpd per house]. In case of solar home lighting system, it is limitedto 40% of the benchmark cost for units up to 300 watts capacity and 30% of the benchmark costsfor units above 300 watts to 1000 watts. The benchmark cost is prescribed by MNRE from time totime.

The institutions eligible to participate in the Scheme include HFCs, SCBs, RRBs, ScheduledUrban Cooperative Banks (UCBs),ACHFs andARDBs.

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Planning Area

Urban Agglomeration

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3.4 Select State Level Initiatives in Housing

3.4.1 West Bengal

'Gitanjali' and 'Amar Thikana':

Adhikar:

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The State Governments have also taken various initiatives towards providing housing to all throughdifferent schemes and policies. These schemes sometimes complement the existing CentralGovernment Schemes. State Level initiatives of select States are outlined below:

The Department of Housing, Government of West Bengal undertakes various activities mainlyrelating to the framing and implementation of various Social Housing Schemes through theDirectorate of Housing and West Bengal Housing Board . Various Schemes active in the State are:

Housing Department of Bengal shall take upconstruction of 20,000 (twenty thousand) flats for minority people and 10,000 (tenthousand) houses for the fishermen. With a view to provide proper shelters free of cost tothe poor, the Housing Department of the Government has laid proper focus on constructionof houses for the Economically Weaker Section of people. This Scheme is beingimplemented in the rural areas and non-Municipal urban areas in coordination with sevenother Government Departments under the name of 'Gitanjali' and 'Amar Thikana'.

The objective of the Scheme is to provide proper shelters to the economically weakersection of society as well as to create additional employment opportunities for constructionworkers, etc. The cost of such dwelling units for new construction on beneficiary's land inrural areas varies across the span and terrain of the State

Panchayat and Rural Development Department is implementing the Scheme 'AmarThikana' at a unit cost of 45,000/- for the plain areas and 48,500/- in hills, difficult areasand coastal areas. Families with monthly income of 6,000/- or less are benefitted under theScheme.

The Housing Department decided to implement Low Income Group (LIG)Housing Schemes directly to solve the accommodation problem of the LIG peopleespecially the minority people residing in urban areas. To mitigate the accommodationproblem of the Middle Income Group people residing in urban areas, the HousingDepartment has taken up a programme for construction of some MIG Housing Schemes onrental basis. The Housing Department at present maintains about 34,000 flats of variouscategories throughout West Bengal. In 2012-13, the State Government has also piloted onespecial scheme "Adhikar", conceptualized by the State Government.

During 2013-14, more than 250,000 lakh houses were completed under the IAY andAdhikar Scheme. Since May, 2011, 83,000 houses have been constructed under theGitanjali Scheme for Economically Weaker Sections (EWS) with total cost of around1,000 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 Shelter-cum-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 womenundertaking their journey by road.

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A new State Plan Scheme, 'Nijo Griha Nijo BhumiPrakalpa' was introduced to provide housing to all landless & homeless families. Totalnumber 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 2011-12, agricultural pattas were distributed among 7,912 beneficiaries while during the period2012-13, the total number of agricultural pattas distributed was 35,461. Pattas have beendistributed to the eligible beneficiaries.

With a view to makethe Housing programme for Economically Weaker Section of people (EWS) more effectiveand 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. Constructionwork of houses has been proposed under Special Grant from BRGF for construction of34,758 dwelling units in the eleven (11) backward districts of the State (Purulia, PaschimMedinipur, Purba Medinipur, Bankura, Jalpaiguri, Birbhum, South 24 Parganas, Malda,Mursidabad, North Dinajpur and South Dinajpur). The proposal has been sanctioned by thePlanning Commission of the Government of India. The scheme has started in the year2012-13.

The State is committed to provide affordable housing to people specially belonging toBelow Poverty Line (BPL), Economically Weaker Section (EWS), Backward Classes andMinorities. As a step forward, West Bengal Housing Infrastructure DevelopmentCorporation (WBHIDCO) with Bengal Shapoorji Housing Development Pvt Ltd isengaged 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 LIGcategory of population.

The State has taken special initiative to provide houses to the citizens belonging to the poor andweaker sections of the society . In order to overcome the housing problems in urban areas, theState has established Maharashtra Housing and Area Development Authority (MHADA) and City& Industrial Development Corporation (CIDCO) Limited. Besides this, the Slum RehabilitationAuthority (SRA) has been set up with an objective of constructing houses for slum dwellers inurban areas of the State. Indira Awas Yojana, Rajiv Gandhi Gramin Niwara Yojana, etc. are beingimplemented in the rural areas of the State to provide quality houses to the people belonging to theBPLfamilies and weaker sections of the society.

MHADA plays an importantrole in housing development by providing houses in Mumbai and some parts of the State ataffordable prices. U , MHADA has constructed and redeveloped 4,34,538dwelling units.

CIDCO is implementingdevelopment programmes covering housing for all sections of the society and providinginfrastructures 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.

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pto March, 2013

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Housing Schemes under Backward Region Grant Fund (BRGF):

Maharashtra Housing & Area Development Authority:

City and Industrial Development Corporation Limited:

3.4.2 Maharashtra

10The Economic Survey of Maharashtra 2013-14 (https://mahades.maharashtra.gov.in)

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SPPL, a Company fully owned byGovernment of Maharashtra (GoM) was set up in 1998 with an objective of acceleratingslum rehabilitation. Upto November, 2013, 111 buildings comprising of 10,673 tenementswere constructed (of which 10,165 tenements have been allotted) incurring an expenditureof 458 crore.

The State is implementing Beedi Kamgar GharkulYojana since July, 2001 for construction of houses at Solapur, Nashik, Pune, Kolhapur,Nanded, Garkheda in Aurangabad and Kamtee in Nagpur for Beedi workers. Under theScheme, 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 amountof 42.07 crore has been distributed to the seven beedi workers organizations forconstruction of 19,847 houses. An amount of 2 crore is budgeted for the scheme in thefinancial year 2013-14.

Indira Awas Yojana (IAY) is being implemented in the State sinceApril, 1989 to construct the houses for houseless BPL families in the rural areas. It is acentrally sponsored scheme with Central and State share in the ratio 75:25. The GoI hasfixed the cost of construction at 70,000 per house fromApril 01, 2013. However, GoM hasincreased the total cost of each house to 1,00,000 and provides the additional amountrequired to construct the house.Atarget of constructing 1,37,314 houses is fixed for the year2013-14 for which GoI has sanctioned 720.90 crore, while the State has made a provisionof 689.94 crore. Upto January, 2014 construction work of 54,666 houses has beencompleted incurring an expenditure of 732.89 crore. During 2012-13 in all 1,45,764houses were constructed incurring an expenditure of 1,138.60 crore.

This Scheme is being implemented in the Statefor rural BPLfamilies. Under this Scheme, grant of 68,500 is given to BPLbeneficiaries toconstruct their own houses. This Scheme is implemented through the District RuralDevelopment Authority of 33 Zilla Parishads. An amount of 93.21 crore was madeavailable for construction of 13,607 houses in 2011-12 and 380.24 crore for 55,428 housesin 2012-13.

The State has decided to build1,25,000 houses forAPL beneficiaries in low income category under Revised Rajiv GandhiGramin Niwara Yojana - II. The cost of each house is fixed at 1,00,000 of which, a loan of90,000 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 isborne by the GoM, as subsidy.

The Housing Policy of the State of Madhya Pradesh enunciated in1995 was amended in 2007 due to change in demand for urban housing due to rapidurbanization. Considering growing need for urban housing, provision for participation ofprivate and corporate sectors has been made in the policy to meet the requirement of socialhousing in the state. Provision of providing government land at concessional rates fordevelopment of habitations to construction agencies has also been made. The Policyencourages PPP to meet the shortages of houses. Provision has been made to grant

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Beedi Kamgar Gharkul Yojana:

Indira Awas Yojana:

Rajiv Gandhi Gramin Niwara Yojana-I:

Revised Rajiv Gandhi Gramin Niwara Yojana-II:

Housing Policy, 2007:

3.4.3 Madhya Pradesh11


11The Department of Housing and Environment, Government of Madhya Pradesh (http://www.mphed.nic.in/)

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permission for township development in agricultural areas scrapping the existing practiceof compulsion for diversion of lands. The Policy retained an emphasis on resolving thehousing problems of the economically weaker sections of society. The Policy stated that itwould encourage private entrepreneurs in these sectors; since Government recognized theneed to simplify and rationalize the rules and procedures that governed this sector.

The Mukhyamantri Awas Yojana has been started inMadhya Pradesh with a view to providing dwellings to a large number of houselessfamilies. Financial assistance to 33,739 families has been made available for constructingtheir own houses under the Scheme, which was launched in 2007. The Scheme hasbenefited those houseless people who do not come under the ambit of IndiraAwasYojana.

For the urban poorresidents of slums, through PPP/new Scheme dwelling houses to be constructed in thevarious towns of the Madhya Pradesh, so that every urban poor can get a suitable house withbetter amenities.

This CentrallySponsored Scheme has been initiated by integrating the National Slum DevelopmentProgramme and Valmiki Ambedkar Housing Scheme under sector reforms plan inDecember, 2005. Major objective of this Scheme is to provide the Urban Poor withadequate housing and infrastructural facilities in the slum areas. This Scheme is beingimplemented in the cities and towns other than those which are included in the JNNURM.

The StateGovernment 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. ThisScheme also aims to provide affordable houses to people belonging to EconomicallyWeaker Sections and Lower Income Groups. Under the Mukhya Mantri GRUH Yojana, theState Government has implemented Slum Rehabilitation Policy, 2013 based on PublicPrivate Partnership (PPP) for rehabilitation of slum dwellers. Affordable Housing Policyhas also been implemented to provide houses to people belonging to Lower or MiddleIncome Groups.

About seven lakh families reside inslums in the urban areas of Gujarat. Hence, the Policy has been framed by the StateGovernment for in-situ rehabilitation of the slum dwellers families on public land byproviding houses of minimum 25 sq. meters carpet area with basic civic amenities, free ofcost through public private partnership. The slum dwellers' families that are living in slumson or before December 01, 2010 will be considered as beneficiaries. The Policy defines theroles and responsibilities of the Public Institutions and Private Developers and specifies theincentives provided to the private developers associated with the slum rehabilitationprojects.

Through this Policy the State Governmentaims to provide housing at reasonable price to poor urban families belonging to lower andmiddle income group, by involving both public institutions and private developers in such

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CM Infrastructure development programme (District Plan):

Integrated Housing and Slum Development Project (IHSDP):

Mukhya Mantri GRUH (Gujarat Rural Urban Housing) Yojana:

Gujarat Slum Rehabilitation Policy - PPP - 2013:

Gujarat Affordable Housing Policy - 2014:

3.4.4 Gujarat12

12Urban Development and Urban Housing Department, Government of Gujarat (http://www.udd.gujarat.gov.in/)

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projects. The Objectives of the Policy are (1) To construct 50 lakh houses in next five yearsout of which 22 lakh houses are planned in urban area, and (2) To provide well plannedhouses having basic civic amenities at affordable prices to EWS, LIG and MIGbeneficiaries.

The Department of Housing, Government of Karnataka has been implementing its own housingprogrammes and also effectively implementing Centrally Sponsored Schemes . Housing needs oflow income, middle income and high income groups are also catered to by the Department, apartfrom housing for slum dwellers as a part of their rehabilitation and improvement of slumprogrammes. Three organisations under the Department of Housing catering to housing needs ofthe various sections of the society are:

The RGRHCL wasestablished by the State Government in the year 2000 to implement all the State and CentralGovernment sponsored housing schemes for economically weaker sections of the societyboth in rural and urban areas. The main objective of the Corporation is to provide affordablehousing for persons belonging to EWS and LIG.

Established under Karnataka Housing Board Act,1962 as a successor to Mysore Housing Board constituted in 1956. The primary objective ofKHB is to make such schemes and to carry out such works as are necessary for the purposeof 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 istherefore, recognized as the most important agency for housing throughout Karnataka.

Constituted during July, 1975 under theprovisions of the Karnataka Slum Areas (Improvement Clearance) Act 1973. The mainobjective of the Board is to provide basic amenities to the slum dwellers and shelter to theneedy in the slums.

In 2013-14, the State has allocated 1,161.50 crore for the implementation of housing schemes, out of which anamount of 1,033.44 crore has been released and 947.75 crore has been spent up to October, 2013.

This Scheme was introduced by the State Government inthe year 1991-92 for providing the housing for rural houseless poor. The annual income of thebeneficiary is limited to 11,800/-. Presently, it has been enhanced to 32,000. From 2013-14 theGovernment has fixed unit cost of 1.50 lakh, in which 1.20 lakh is subsidy from the StateGovernment and remaining 30,000/- is beneficiary contribution or bank loan. 50% of the target isreserved for SCs/STs and 50% is for general categories. Under this Scheme, the RGRHCL hasconstructed 2.76 lakh houses during the last 3 years. In 2013-14, the target is to complete 1.80 lakhhouses including backlog, of which 90,342 houses have been constructed upto October, 2013.

This Scheme is implemented for rural houseless poor belonging toSC/STs. The annual income of the beneficiary is limited to 32,000. The beneficiaries are selectedby the Gram Panchayats through Gram Sabhas. The unit assistance per house has been enhanced

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Housing Programmes in the State of Karnataka

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Karnataka Slum Development Board:

RuralAshraya/BasavaVasathiYojane:

Ambedkar Housing scheme:

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14Economic Survey of Karnataka 2013-14

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from 40,000 to 63,500 from 2010-11 ( 50,000 as subsidy, 10,000 as bank loan and 3,500being beneficiary contribution).1.56 lakh houses have been constructed during 2000-01 to 2011-12. In 2013-14, the target is to complete 5,000 houses of which 2,644 houses have been constructedupto October, 2013.

This Centrally Sponsored Scheme was introduced in 1989-90. This schemeis implemented for rural BPL houseless families. From 2013-14, the Government of India hasenhanced the subsidy per house to 70,000. Further, the State Government has enhanced the unitcost to 1.50 lakh. In this 52,500 is subsidy from Central Government and 67,500 is subsidyfrom State Government and remaining 30,000 is the beneficiary contribution or bank loan. TheScheme is being implemented by the RGRHCL. From 2004-05 to 2012-13, 6.37 lakh houses havebeen constructed upto October 2013. U 41,260 houses have been completed asagainst the target of 1,00,000 houses for 2013-14.

Urban Ashraya Scheme was introduced in 1991-92. It is a State-sponsored Scheme implemented for the urban poor. The annual income of the beneficiary shouldbe 32,000. The unit cost under this scheme is 30,000 in which 25,000 is a loan fromGovernment for all the beneficiaries and 5,000 is beneficiary contribution. The loan provided tothe 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 UrbanHousing Scheme. In 2013-14, the Government, has enhanced unit cost to 2 lakh per house, in this1.20 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 tocomplete15,000 houses against which 3,136 houses have been completed.

In 2010-11, the State hadintroduced a new Scheme to benefit the people above poverty line by providing affordable housesto the low income group families like auto drivers, film industry workers, unorganized sectorworkers, beedi workers, street vendors, etc. The annual income of the beneficiary is limited to1.00 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 unitcost of the flat is 3.90 lakh, 4.25 lakh and 5.20 lakh respectively for different floors.

The State Government in the Housing and Urban Development Department has been making concertedeffort to tackle the problem of urban housing for the poor, lower and medium income groups. The varioushousing schemes in the state of Odisha are :

The State Government has launched Mo Kudia Scheme from the year 2008-09. Therural households whose name does not find place in the BPL list but are otherwise genuinely poormay also be allotted a house in the joint name of spouse. Preference will be given to the followingcategories :-

The poor women in distress, physically challenged, (over 40%), mentally challenged,victims of domestic violence, destitute widows, women headed households, adult orphansof Government registered institutions, victims of leprosy and AIDS will be eligible to get ahouse.

` ` ` ` `

`

` ` `

`

` ` `

`

`

` `

`

`

` ` `

pto October, 2013,

15

�

�

�

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�

IndiraAwasYojana:

Urban Ashraya Scheme:

Nanna Mane (Affordable Housing for Low-income Groups):

Mo Kudia:

3.4.6 Odisha

15The Housing & Urban Development Department, Government of Odisha (http://www.urbanodisha.gov.in/)

118

The poor victims of fire or flood can be considered.

The tribal households whose houses are "fully collapsed" due to elephant menace can beconsidered.

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 andbetter targeting. Special provision has been made to cover the affected households whose house isdamaged due to Fire, Flood, Riot and Elephant Menace. Out of the total target, 25% is keptreserved for the above people as Mo Kudia Special. This is allotted to the Districts over and abovethe normal Mo Kudia Target. The unit cost of Mo Kudia House in 18 IAPDistricts is 75,000/- and12 Non IAP Districts is 70,000. State's achievement under Mo Kudia (Normal) during 2013-14upto the end of March, 2014 is 18,668 as against a target of 38,998 houses, i.e. an achievement of48 %.

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 areprovided. Since its inception in 1987-88, funds have been allotted for construction of 2,332 housesand 1,989 units have been completed. Besides, two community halls have been completed and 32tube wells have been installed. Under the Scheme, 1,500 low cost homes are targeted to beconstructed during 2012-13.

is a Central Schemelaunched 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 andSundargarh of the State. 3,921 Gram Panchayats (GPs), 217 Panchayat Samitis (PSs), 1 MunicipalCorporation, 22 Municipalities and 50 Notified Area Councils (NACs) are covered under thisScheme. This has a holistic objective of making the Housing programme for EconomicallyWeaker Section of people (EWS) more effective and to address the problem of regionalimbalances. In respect of housing for poor people special stress has been given to the backwardregions (Districts) of the state. During 2013-14, Government of India has again raised the annualentitlement of 20 BRGF Districts to 417.01 crore under BRGF Development Grant.

`

`

`

�

�

�

�

�

Low Cost Housing Scheme under the National Welfare Fund for Fishermen (NWFF),

Housing Schemes Under Backward Region Grant Fund (BRGF)


119


Chapter 4

4.1 Role of National Housing Bank

Vision

Mission

Objectives

4.1.1 NHB was established in 1988, under the National Housing Bank Act, 1987, to operate as aprincipal agency to promote housing finance institutions and to provide financial and othersupport to such institutions. NHB is wholly owned by the Reserve Bank of India. One of the primeobjectives of the Bank is to establish and promote a sound and stable housing finance system in thecountry. NHB is pursuing its charter and vision to shape and develop the housing finance marketin India along sustainable lines and promoting financial and institutional depth in the housingfinance sector. NHB is engaged in a range of activities that are key to the development of marketbased solutions for low and moderate income housing segments. Its activities include building ofinstitutional framework and market infrastructure, which are critical for expansion andstabilization of the housing finance system. Apart from its various promotional activities, NHBalso seeks to undertake measures that promote confidence amongst stake holders. Underthe provisions of the Act, NHB as the regulator for the Housing Finance Institutions (HFIs), seeksto promote sound and stable having finance system and its vision, mission and objectives arederived accordingly.

4.1.2 NHB is a multifunctional Development Finance Institution (DFI) and performs a range ofactivities including financing, regulation and supervision, and promotional initiatives. NHBregulates and supervises the activities of housing finance companies in accordance with theprovisions of the Act. This includes registration of housing finance companies for conduct ofhousing finance business, onsite and off-site supervision of housing finance companies, consumerinterface and protection and coordination with other regulators. NHB, through its multifunctional,mutually synergistic and complementary roles, has broadened the scope and reach of the housingfinance 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 mixof policy initiatives. Housing finance system in India has evolved and steadily grown throughvarious stages with NHB acting as a catalyst. NHB through its multi-functional role is engaged inbuilding the market infrastructure for efficient functioning. NHB is strongly committed towardscreating an appropriate environment for affordable housing and housing finance that can cater to

various

"Promoting inclusive expansion with stability in housing finance market."

"To harness and promote the market potentials to serve the housing needs of all segments of thepopulation with focus on low and moderate income housing."

Role of National Housing Bank

120

all segments of the population.At the same time, NHB continually seeks to contribute towards thedevelopment of sustainable habitat and towards the promotion and preservation of environmentthrough energy efficiency and similar initiatives. In this regard, NHB continues to seekpartnership with domestic and international agencies towards the promotion and implementationof such initiatives in the country. Through its various promotional and financing initiatives, NHBis pursuing its Vision of "Promoting Inclusive Expansion with Stability in the Housing FinanceMarket" and its Mission "To Harness and promote the market potentials to serve the housing needsof all segments of the population with focus on low and moderate income housing". NHB hassought 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 mortgagemarket. NHB's programmes of financial assistance have focused on inclusive growth throughmarket based solutions and approach. In formulation and delivery of such solutions, NHB'sinitiatives and policies have led the market towards greater efficiency and competition and widerchoice 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 amulti-pronged approach to tackle this problem. These include institution-building initiatives andmeasures for creating conducive environment for innovative practices in sync with marketoriented 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 loanassistance to mortgage lenders for better home ownership among lower incomehouseholds.

2. Initiatives on risk mitigation through mortgage credit guarantee institutions and funds,which improve affordability for the borrowers as also encourage the lenders to increasetheir exposure to these segments.

3. Capacity building through training programmes, standard as well as customized, formortgage lending personnel at different levels.

4. Information dissemination aimed at better market functioning and transparency throughadvocacy and coordination with lending institutions.

Chapter-4 Role of National Housing Bank

121


Table 5: Financial Highlights for the last six years

Table 6: Income expenditure and profitability trend in the last four years

(Amount in crore)`

(Amount in crore)`

4.2 Performance of National Housing Bank (July 01- June 30)

Picture 1: NHB's Financial Performance at a Glance

Year ended 30th June 2011 2012 2013 20141. Total Income 1,948 2,488 3,024 3,5202. Operating Expenses 1,518 1,889 2,262 2,6203. Operating Profit (1– 2) 430 600 762 9004. Provisions & Contingencies 31 56 98 1145. Profit Before Tax (3– 4) 399 544 664 7866. Provision for Tax 120 157 214 2997. Profit After Tax (5– 6) 279 387 450 487

2009 2010 2011 2012 2013 2014

Capital 450 450 450 450 450 450

Reserves 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 4 184 184

Net NPAs Nil Nil Nil 3 156 111

Profit After Tax 236 280 279 387 450 487

CRAR (%) 18 20 21 20 17 15

No. of Employees 89 89 87 95 91 107

PAT per Employee 2.62 3.15 3.21 4.07 4.84 4.55

Year ended 30th June

122

4.3 Resource Mobilization

Table 7: Total Borrowings as on June 30, 2014Outstanding

4.3.1 NHB raised both short term and long term resources during the year. Short term resourcesincluded issuance of Commercial Papers (CPs) and short term loans from Banks. Long termborrowings includes issuance of Coupon Bonds, Rural Housing Fund (RHF), Deposits fromHousing Finance Companies (HFCs) and Deposits from public under (SUNIDHI andSUVRIDDHI) term deposit schemes. The net incremental borrowing was 17,084 crore for theyear ended June 30, 2014. The total borrowing as on June 30, 2014 was 39,460crore.

`

outstanding `

(Amount in crore)`

Resource Amount

Deposits from Public 268

Borrowings - CBLO 2,337

Urban Housing Fund (UHF) 1,000

Rural Housing Fund (RHF) 17,278

Foreign Borrowings 904

Borrowings from RBI 13

Term Loans 5,945

Loan Against Deposits 540

Bonds and Debentures 11,175

Total 39,460

Graph 4: Share of outstanding borrowings as on June 30, 2014


Depositsfrom Public

1%

Borrowings-CBLO

6% UHF3%

Bonds andDebentures

28%

Term Loans15%

ForeignBorrowings

2%

RHF44%

LoanAgainstDeposits

1%

Borrowings fromRBI

0.03%

123


NHB has, in partnership withWorld Bank through Government of India, initiated a programme to encourage the flow offunds to the urban poor for their housing requirements. Under the programme NHB will bereceiving a loan of SDR 66.1 million (equivalent to USD 100 million) over a period of fiveyears from World Bank, which will be used to refinance the retail loans extended by thePrimary Lending Institutions (PLIs), that conform to the criteria laid down under theprogramme. 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.

Annual Income of the Household to be less than or equal to 2 lakh

Loan to Value ratio to be less than or equal to 80%

The Dwelling Unit (DU) must be in urban area

No loan for plot purchase shall be eligible

The loans must meet the Social and Environment due diligence standard adopted underthe programme. NHB has claimed $4.85 million under the programme in the first trancheand is in process of claiming $2.45 million under the second tranche.

NHB hasentered into a partnership with DFID (Department for International Development) of UKvide agreement dated October 7, 2013 for supporting the cause of affordable housing inthe low income states of the country. The programme will seek to address both supply sideand demand side constraints to housing shortage in the country.

Under the demand side component, NHB shall provide for refinance to the eligibleHousing Finance Companies (HFCs) in respect of their housing loans extended to thetarget segment. The households having an annual income of 4 lakh or less will be coveredunder the programme. Housing loans to households deriving income from informalsources 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.

: This programme, the first of its kind in India, was undertaken inpartnership with the KfW Development Bank of Germany. The agreement was signedbetween the organizations on December 31, 2010. A Line of Credit of €50 million wasprovided by KfW to NHB for extending refinance assistance to primary lendinginstitutions in respect of their individual housing loans for energy efficient units.

For facilitating the calculation of potential energy savings by a household under theProgramme, an assessment tool was specifically developed by Fraunhofer IBP, Germanyand 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

`

`

`

4.3.2 Foreign Collaborations and Borrowings

4.3.2.1 NHB - World Bank Low Income Housing Programme:

4.3.2.2 NHB - DFID Affordable Housing Programme in Low Income States:

4.3.2.3 NHB - KfW - Promotional Programme for Energy Efficient New ResidentialHousing in India

�

�

�

�

�

124

parameters (active and passive measures), certification was provided to the potentialindividual borrowers for use in the loan procurement process. The certification andaccreditation for projects under the Programme was provided by Fraunhofer, IBP andTERI.

Logo and branding for the energy efficient units certified under the Programme has beenunveiled, which shall help in providing further recognition to the Programme. A separatewebsite for the programme www.ee-homes.com has been launched for disseminatinginformation about energy efficiency in general and the Programme in particular. Severaltraining programmes and seminars have been conducted for capacity building andawareness generation. The full amount of €50 million has now been utilized, providingrefinance in respect of 2,065 dwelling units.

During the year 2013-14, refinance disbursements aggregated 17,856.18 crore as against thesanctioned limits of 31,548.09 crore.

`

`(including the carried forward limits)

(Amount in crore)`

4.4 Refinance Operations

4.4.1 Refinance Sanctions and Disbursements

Table 8: Refinance Sanctions and Disbursements for the years 2012-13 and 2013-14

InstitutionCategory

Sanctions Disbursements

2012-13 2012-13 2013-14

HFCs 10,678.20 11,414.70 7,693.51 9,632.99

SCBs 21,354.60 19,552.70 9,459.33 7,942.72

Cooperatives 45.00 215.00 0.00 0.00

RRBs 652.08 365.69 388.80 280.47

Total 32,729.88 31,548.09 17,541.64 17,856.18

2013-14

Graph 5: Refinance Sanctions for the years 2012-13 and 2013-14


2012-13

2013-14

HFCs CooperativesSCBs RRBs Total

35000

30000

25000

20000

15000

10000

5000

0

Am

ount

inC

rore

`

125


Graph 6: Refinance Disbursements for the years 2012-13 and 2013-14

As can be inferred from the above table and graphs, in case of HFCs, sanctions and disbursements increasedover the previous year, whereas for SCBs and RRBs there was a fall in the figures of sanctions anddisbursements. In case of Cooperative Institutions, though there is increase in the sanctions in comparison to theprevious 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 refinancedisbursements achieved during any one year, registering a marginal increase of approximately 2% over theprevious year's refinance disbursements.

The cumulative refinance disbursements as on June 30, 2014 were 1,20,485 crore, with the maximum sharewith SCBs, followed by HFCs, Co-operatives and the RRBs, and the break-up is given below:

`

`

4.4.2 Cumulative Disbursements

Table 9: PLI- wise break-up of cumulative disbursements as on June 30, 2014

PLIs % of Total

Housing Finance Companies 51,569 42.80

Scheduled Commercial Banks 64,968 53.92

Regional Rural Banks 1,423 1.18

Cooperatives 2,525 2.10

Total 120,485 100.00

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

2012-13

2013-14

TotalRRBsCooperativesSCBsHFCs

20000

15000

10000

5000

0

42.80%

53.92%

1.18%2.10%

Housing Finance

Companies

Scheduled Commercial

Banks

Regional Rural Banks

Cooperative Sector

Amount in ` crore

Am

ount

inC

rore

`

126

4.4.3 Trend on refinance disbursements between 1999 and 2014

Graph 8: Trend in NHB's refinance disbursements between 1999 and 2014

Table10: Trend in NHB's refinance disbursements between 1999 and 2014


0

20000

40000

60000

80000

100000

120000

140000

Disb.

Cumm.

Disb.Am

ount

inC

rore

`

Year

1999 -00

2000 -01

2001 -02

2002 -03

2003 -04

2004 -05

2005 -06

2006 -07

2007 -08

2008 -09

2009 -10

2010 -11

2011 -12

2012 -13

2013 -14

842

1,008

1,025

2,710

3,253

8,062

5,632

5,500

8,587

10,854

8,108

11,723

14,390

17,542

17,856

Disbursement CumulativeDisbursement

4,235

5,243

6,268

8,978

12,231

20,293

25,925

31,425

40,012

50,866

58,974

70,697

85,087

102,629

120,485

(Amount in Crore)`

127


4.4.4 Tenure wise Breakup of Disbursements

Table 11 : The tenure-wise breakup of disbursements during FY2012-13 and 2013-14

Disbursements made during 2013-14 and outstanding as on 30.06.2014, based on typeof interest rate

Table 12:(Amount in crore)`

Breakup of refinance disbursements in 2013-14, based on size of underlying individualhousing loans

Table 13:

Tenure (years)

2013 -14

Amount in` crore

% toTotal

Amount in` crore

% toTotal

Upto 1 year 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



Over 10 years 1316.00 7.50 4355.33 24.39

Total 17541.64 100.00 17856.18 100.00

2012 -13

% of Total

8.15

11.23

15.19

34.66

12.60

16.41

1.76

100.00

Amountin crore`

1,455.33

2,004.93

2,712.37

6,188.34

2,249.51

2,930.70

315.00

17,856.18

Individual Loan Size

Prospective

Total

Upto` 2 lakh

% of Total

72.04

27.96

100.00

Outstandingas on

30.06.2014

28,413.01

11,024.86

39,437.87

% of Total

72.56

27.44

100.00

Disbursementsduring 2013 -14

12,956.37

4,899.81

17,856.18

Type of Interest Rate

Fixed Rate

Floating Rate

Total

More than 2` `lakh and upto 5 lakh




Over 25` lakh

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.

` `

`(Amount in crore)Table 14 : Area-wise trend in refinance disbursed against the individual housing loansbetween 2009 and 2014.

Year Total Disbursements Rural Urban

Amount % 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 and2014

(Amount in crore)`


Table 16: Trend in refinance disbursements made to different catagories of Primary lendingInstitutions between 2009 and 2014

(Amount in crore)`

HFCs SCBs UCBs RRBs Cooperatives Total

3,543.80 4,150.00 189.00 184.96 40.00 8107.76

3,308.67 8,112.00 168.00 134.12 0.00 11,722.79

5,302.13 8,851.42 93.32 143.04 0.00 14,389.91

7,693.51 9,459.33 0.00 388.80 0.00 17,541.64

Year

2009 -10

2010 -11

2011 -12

2012 -13

2013 -14 9,632.99 7,942.72 0.00 280.47 0.00 17,856.18

Name of the Refinance Scheme 2011 - 12 2012 - 13 2013 - 14Regular Scheme 8,782.37 9,692.55 7,599.34

Rural Housing Fund (RHF)(Housing + Solar)

3,003.03 4,027.42 3,527.31

Golden Jubilee Scheme (GJRHRS) 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 17,856.18Total

129


Graph 9: Trend in refinance disbursements made to different categories of primary lendinginstitutions between 2009 and 2014

As can be gauged from the Table and Graph in the last five years, Scheduled Commercial Bankshave been constituting the biggest category of PLIs (Primary Lending Institutions) availingrefinance from NHB (except for the current year i.e. 2013-14 when the HFCs constituted thebiggest category). The possible reasons can be that the Banks, due to their size, branch networkand captive customer base and knowledge of the retail finance segment, are able to act moreaggressively as compared to other PLIs. In the HFC sector, barring a few large sized HFCs, mostof the players are quite small and have limited regional presence, and are therefore not able tocompete equally with banks on the outreach as well as cost. However, along with such constraintsnotwithstanding, HFCs have been performing well during the last few years, expanding theircustomer base and housing loans portfolio while keeping their NPAlevels under control, resultantof which they have surpassed the SCBs in terms of availing refinance from NHB in the year2013-14.

The refinance assistance to the cooperatives has been negligible during the last few years. This ison account of declining levels of recovery and losses incurred by these institutions, which hasmade 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 andARDBs.

NHB, in partnership with KfW, Germany, is promoting energy efficiency in the housing sector. In2010-11, NHB has launched the Energy Efficient Housing Refinance Scheme, aimed atencouraging energy efficiency in the residential sector. The objective of the Scheme is to providerefinance assistance to PLIs including Banks, HFCs etc. in respect of their direct lending toindividuals for purchase/construction of new energy efficient housing units in urban areas. DirectHousing loans sanctioned and disbursed after January 01, 2011 by the PLIs to individuals in urbanareas 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 whichare designed in a way that fulfill the energy efficiency requirements are included under thepromotional programme. The refinance assistance under the Scheme aims at improving thedemand for energy efficient residential units. NHB has disbursed refinance amounting to 430.21crore against 2130 units under this Scheme.

`

4.4.5 Energy Efficient Housing

0

2000

4000

6000

8000

10000

12000

2009-10 2010-11 2011-12 2012-13 2013-14

HFCs

SCBs

UCBs

RRBs

Coop. SectorAm

ou

nt

incr

ore

`

130

Table 17: Trend in disbursements made by NHB under Energy Efficient Housing RefinanceScheme

4.4.6 Rural Housing Fund

Table 18 : Trend in allocation and utilization of RHF

The Hon'ble Finance Minister, in the Union Budget speech for 2008-09, announced the setting upof the Rural Housing Fund (RHF) to enable primary lending institutions to access funds forextending housing finance to targeted groups in rural areas at competitive rates. The corpus of thefund for 2008-09 was 1,778.18 crore, which was enhanced to 2,000 crore each for 2009-10 and2010-11, 3,000 crore for 2011-12, 4,000 crore for 2012-13 and further to 6,000 crore for2013-14. So far, 1.23 million dwelling units were financed under this Fund.

` `

` ` `

(Amount in crore)`

4.4.7 New Refinance Schemes Launched

Refinance Scheme forWomen:�

NHB has launched the following two new schemes during the year 2013-14.

In order to improve the flow of formal housing finance to womenin urban areas, NHB has launched a Special Refinance Scheme for Women, whereby the retaillending institutions are encouraged to improve their housing finance to women borrowers. ThisScheme will help in encouraging women to acquire residential property in their own name,


Amount in Crore`

128.96

103.77

197.48

430.21

Year

2011 -12

2012 -13

2013 -14

Total

Year Allocation

Utilization by different Institutions

HFCs SCBs UCBs RRBs ACHFS &ARDBs

Total No. ofUnits

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

Total 18,778.18 11,502.27 3,728.84 32.32 1,043.29 32.00 16,338.72 12,28,005

131


thereby enabling their empowerment. The Scheme envisages providing refinance assistance toPLIs at concessional rates in respect of their housing loans where the primary borrower is a womanand the property is solely or jointly owned by women. Refinance under the Scheme would beavailable at concessional interest rates upto of 100 bps below the NHB's Prime Lending Rate. Theinterest rate concession would be offered in a graded manner, with emphasis being placed onencouraging lower ticket size loans. The Scheme is being implemented through all eligible PLIshaving pan India presence. During the year 2013-14, NHB has made disbursement of 938.31crore under the Scheme.

In the Union Budget 2013-14, the Hon'ble Finance Minister has made theannouncement regarding the establishment of an Urban Housing Fund (UHF), having the corpusof 2,000 crore. Accordingly, NHB has formulated a new refinance Scheme for channelizingfunds into the urban housing sector. The Scheme seeks to augment resources and improve creditavailability and meet the housing needs of the people in lower income segments residing in urbanareas. During the year 2013-14, NHB has made disbursement of 890.10 crore under the Scheme.

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`(Amount in crore)

� Urban Housing Fund :

Table 19: Allocation and utilization of UHF

4.5 Sanctions and Disbursements through Direct Finance

4.5.1 Project Finance and Technology Promotion

4.5.2 Housing Micro Finance Programme

4.5.3 Cumulative Performance (Excluding project refinance)

NHB provides direct financial assistance for project lending to a range of borrowers in the public andpublic-private partnership, microfinance institutions, state level housing boards and area developmentauthorities for integrated housing projects and slum redevelopment projects.

During the year 2013-14, NHB has sanctioned project finance assistance for one projectamounting to 125 crore and disbursed 34.26 crore. The disbursements were made to publicagencies and dairy cooperatives.

NHB's Housing Micro Finance (HMF) programme started in 2004-05. Through housingmicrofinance, NHB has been providing long term financial support, technical assistance andtraining for housing finance for low income families. Under the programme, NHB has sanctioned101.68 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, dairyworkers and other low income households. More than 90% of the beneficiaries are women.

Till June 30, 2014, 445 projects were sanctioned with project costs of 8,189.37 crore having loancomponents of 5,121.92 crore to provide low income housing for the poor and has financed

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Total 2000.00 145.60 744.50 0.00 0.00 0.00 890.10 18310

2013 -14 2000.00 145.60 744.50 0.00 0.00 0.00 890.10 18310

Year Allocation Utilization by different Institutions

HFCs SCBs UCBs RRBs ACHFS &ARDBs

Total No. ofUnits

132

various agencies, including Public Housing Agencies, MFIs, NGOs, and Public PrivatePartnership projects. Till June 30, 2014, NHB has disbursed 2,233.54 crore as project finance.`

(Amount in crore)`

Table 20: Trend in Project Finance Disbursements made by NHB between 2002 and 2014

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

The Bank regulates and supervises the Housing Finance Companies (HFCs) in public interest, as perprovisions of the National Housing Bank Act, 1987. As on June 30, 2014, the total number of HFCsregistered 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 CoRwithout permission to accept public deposits. Of the 18 HFCs, which have been provided the CoR withpermission to accept public deposits, 6 are required to obtain prior written permission from the NHBbefore accepting any public deposits.

4.5.4 External Commercial Borrowings forAffordable Housing Projects

4.6 Regulation and Supervision


Year SanctionedAmount

DisbursementAmount

No. ofHouses

Benefited

Category to whichFunding viz. MFI,

PPP etc .

CumulativelyNHB hasextendedfinancial

assistancefor

constructionof houses

and housingrelated

infrastructurefor around1,25,000houses

Category of Fundingincludes:

Housing Boards,Development

Authorities, MunicipalCorporations, State

Housing Corporations,Welfare Housing

Organizations, MicroFinance Institutions,Non-Governmental

Organizations, DairyCooperatives and

Public PrivatePartnershipCompanies

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

133


NHB's regulation and supervision is aimed at preventing the affairs of any HFC being conducted in amanner detrimental to the interest of the depositors and prejudicial to the public interest. As a part ofregulations, NHB has also issued the Directions, Guidelines for the Asset Liability Management Systemin HFCs, Know Your Customer (KYC) andAnti Money Laundering (AML), Fair Practice Code, etc., andCirculars to the HFCs and their auditors, from time to time, in addition to the provisions contained in theAct. NHB also undertakes on-site inspection and off-site surveillance of HFCs through its supervisorymechanism to ensure safety and soundness of HFCs.

Further, to provide value to the stakeholders, a Complaint Redressal Cell has been set up to redress thegrievances of the customers of HFCs. Recently, NHB has implemented Grievance Registration andInformation Database System (GRIDS) to enable the customer of HFC to register online andtrack the same. In order to contain frauds in housing finance, NHB, regularly disseminates theinformation on frauds relating to mortgages to HFCs through Caution Advices, and also interacts withother regulators for market feedback.

complaints

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 W e 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 networkwith PLIs on their implementation.

Box 5: Grievance Registration and Information Database System (GRIDS)

134

4.7.1 Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)

Table 21: NPV subsidy disbursed by NHB between 2009 and 2014, under ISHUP

Till June 30, 2014, as nodal agency, NHB has disbursed NPV of subsidy amounting to 8.67 crorecovering 9,534 beneficiaries under the Scheme.

( Amount in crore)

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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

Year Total

4.7.2 1% Interest Subvention Scheme

Table 22: Disbursement of subsidy to PLIs, under 1% Interest Subvention Scheme between2010 and 2013

NHB and RBI, as nodal agencies, disbursed the interest subvention to beneficiaries through banksand HFCs, and the details during the tenure of the Scheme are shown below:

(Amount in crore)`

Under RRY, 7 MOUs have been signed by Primary lending Institutions (PLIs) with NHB, whichis one of the nodal agency for implementation of the Scheme.

In pursuance of the Budget announcements in FY 2010-11 and 2011-12, the Ministry of Housingand Urban Poverty Alleviation (MoHUPA), Government of India has set up and registered CreditRisk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) on May 01, 2012 and the samehas also been notified by MoHUPA, GoI vide Gazette Notification dated July 7-13, 2012. TheTrust has been set up with an objective to ensure better flow of institutional credit for housing inurban 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 contributionwill be made to the initial corpus by the Settler and the State Governments, who draw on it inaccordance with slum population, i.e. 1,000 crore in the aggregate by the Settler and 200 crore

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4.7.3

4.7.4

Rajiv RinnYojana

Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH)


* Includes disbursements made in FY 2013-14.

1% Interest Subvention Scheme

Year

2010 -11

2011 -12

2012 -13

Banks HFCs Total

21.22 17.32 38.54

170.14 129.86 300

318.29* 102.58* 420.87*

135


by the State Governments. As on date MoHUPA, GoI as settler, has contributed 150 croretowards the corpus fund of the Trust.

CRGFTLIH provides guarantee for housing loan upto 5 lakh sanctioned and disbursed by thelending institutions without any collateral security and/or third party guarantee to the newborrowers in the EWS/LIG categories in urban areas for home improvement/acquisition andpurchase of new or second hand dwelling unit/construction/extension of an affordable dwellingunit with carpet area not exceeding 430 sq.ft.(40 sq.m.). The guarantee cover available under thescheme is to the extent of 90% of the sanctioned housing loan amount upto 2 lakh and 85% forloan amounts above 2 lakh and upto 5 lakh. The lending institutions eligible to avail benefit ofthe Guarantee cover under the Scheme of the Fund Trust are Scheduled Commercial Banks,Regional Rural Banks, Urban Co-operative Banks, NBFC-MFIs, Apex Cooperative HousingFinance Societies registered under the State Co-operative Societies Act and Housing FinanceInstitutions registered with NHB.

Till June 30, 2014, 47 institutions have signed MoU with the Trust under the Scheme. During theperiod, the Trust has issued guarantee cover in respect of 116 loan accounts of 4 Member LendingInstitutions (MLIs) involving a total loan amount of 3.28 crore provided to EWS/LIGhouseholds. These MLIs are Canara Bank, Oriental Bank of Commerce, Syndicate Bank andGRUH Home Finance Ltd. The state wise and income group wise bifurcation of EWS/LIG loanaccounts against which the Trust has issued the Guarantee cover to MLIs is shown in Table below.

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Table 23: State-wise and Income group-wise bifurcation of EWS and LIG loan accountsagainst which the Trust has made the Guarantee cover to MLIs

Name of State Category of Borrowers Total No. ofBorrowers CoveredEWS LIG

1. Jharkhand 0 1 12. Telangana 1 0 13. Kerala 2 6 84. Pondicherry 1 0 15. Tamilnadu 0 2 26. West Bengal 0 1 17. Gujarat 1 47 488. Uttar Pradesh 2 2 49. Madhya Pradesh 1 7 810. Haryana 1 2 311. Karnataka 26 2 2812. Rajasthan 0 3 313. Maharashtra 1 7 8

Total 36 80 116

Sr. No.

GJRHFS has been conceptualized to address the problem of rural housing through improvedaccess to housing credit, which would enable an individual to build a modest new house or makeimprovement or addition to his old dwelling in rural areas. The progress under the Scheme ismonitored by NHB and is reported to the Government of India on quarterly basis. Theperformance 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 hasbeen successful in its endeavor as vindicated by the fact that over 4.2 million units have beenfinanced. The annual targets under the Scheme (in terms of number of units financed) are set byNHB and further NHB monitors its implementation. The targets under the Scheme have beenincreased in a phased manner from 50,000 units in 1997-1998 to 3, 75,000 units in 2011-2012 and

4.7.5 Golden Jubilee Rural Housing Finance Scheme (GJRHFS)

136


Year Target Achievement Achievementagainst target (%)

DisbursementsAmount in crore`

1997 -1998 50,000 51,272 102.54 N.A.1998 -1999 1,00,000 1,25,731 125.73 N.A.1999 -2000 1,25,000 1,41,363 113.09 N.A.2000 -2001 1,50,000 1,58,426 105.62 N.A.2001 -2002 1,75,000 1,87,268 107.01 3246.032002 -2003 2,25,000 1,78,200 79.20 3816.342003 -2004 2,50,000 2,43,753 97.50 6353.822004 -2005 2,50,000 2,58,562 103.42 6440.952005 -2006 2,75,000 2,98,651 108.60 8367.862006 -2007 3,30,000 2,98,426 90.43 7664.582007 -2008 3,50,000 2,71, 537 77.58 8844.812008 -2009 3,50,000 2,58,265 73.79 10337.882009 -2010 3,50,000 3,87,792 110.80 15,565.242010 -2011 3,75,000 2,93,721 78.33 14,781.182011 -2012 3,75,000 3,37,623 90.03 17,226.912012 -2013 4,00,000 4,18,896 104.72 24422.682013 -2014 4,50,000 3,83,971 85.32 18,867.88Total 45,80,000 42,93,457 93.74

(No. of Units) (No. of Units)

to 4,50,000 units in 2013-14. Cumulatively in the period 1997-2014, a total of 42,93,457 dwellingunits were financed as against the target of 45,80,000 dwelling units, with an achievement ofaround 93.74 per cent of the target.

Table 24: Trend in performance of GJRHFS, since inception

Graph 10: Trend in performance of GJRHFS, since inception

500,000450,000400,000350,000300,000250,000200,000150,000100,00050,000

0

Num

ber

of

Unit

s

Target Acheivement

1997

-199

819

98-1

999

1999

-200

020

00-2

001

2001

-200

220

02-2

003

2003

-200

420

04-2

005

2005

-200

620

06-2

007

2007

-200

820

08-2

009

2009

-201

020

10-2

011

2011

-201

220

12-2

013

2013

-201

4

Reverse Mortgage Loan and Reverse Mortgage LoanAnnuity4.7.6

NHB continues with its endeavors to promote the Reverse Mortgage Loan (RML) and ReverseMortgage Loan Annuity (RMLA) by way of Counseling Programmes and Seminars for elderlycitizens of the country to generate awareness amongst them for enabling them to take informeddecision 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 year2013-14. These counseling centers are at Ahmedabad, Bengaluru, Bhopal, Bhubaneswar,Chandigarh, Chennai, Delhi (2), Hyderabad, Kolkata, Lucknow, Mumbai, Nagpur, Pune andPatna. These centers are being run by NHB in association with eminent Non-GovernmentOrganizations (NGO's) working for the elderly. NHB has also been working towards building thecapacities in the commercial banks and HFCs for implementing the product by way of its trainingprogrammes and seminars for the personnel of these institutions.

NHB has been carrying on with its advocacy on the various issues concerning implementation ofthe RML/RMLA. Significant among them was the issue relating to tax exemption of the paymentreceived under RMLA by the senior citizen borrowers. The Government of India have videNotification No.79/2013/F.No.149/54/ 2013-TPL dated October 07, 2013, amended the ReverseMortgage Scheme, 2008 to include RMLAin the Reverse Mortgage (Amendment) Scheme, 2013,eligible for tax exemption.

NHB regularly undertakes various measures towards training and capacity building of variousstakeholders 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 trainingprogrammes.

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 sinceinception.Atotal of 797 participants from various PLIs participated in NHB's programmes. The TrainingProgrammes 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 forHomes'. 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 alsohelps in focussing the discussions on specific areas. The initiative highlights NHB's commitmenttowards capacity bulding in housing finance sector. The programmes for RRBs/UCBs in Hindi speakingareas were conducted in Hindi. The feedback received from the participants has been very good andencouraging.

4.8 Capacity Building

138


S.No. Program Details Location Date No. ofParticipants

Table 25: Trainings conducted by NHB in 2013-14

1. Orientation in Housing Finance Bengaluru July 11 -12, 2013 35

2. Rural Housing Finance Guwahati July 25 -26, 2013 31

3. Rural Housing Finance Warangal August 5-6, 2013 32

4. Rural Housing Finance Hyderabad August 7-8, 2013 42

5. Retail Assets -NPA Management &Recoveries

Hyderabad August 19-20,2013

23

6. Rural Housing Finance Indore August 26 -27,2013

41

7. Mortgage Finance for Homes (for WomenExecutives)

Mumbai September 26 -27,2013

29

8. Rural Housing Finance Akola October 7 -8,2013

35

9. Housing Finance for UCBs Nagpur October 9, 2013 20

10. Rural Housing Finance Udaipur October 24 - 25,2013

29

11. Documentation for Housing Loans Chennai November 11 - 12,2013

42

12. Rural Housing Finance Gurgaon November 19 -20,2013

28

13. Legal Issues in Housing Finance Puducherry December 28 - 29,2013

38

14. Rural Housing Finance Pandyan Grama Bank Madurai January 06 - 07,2014

31

15. Prevention of Fraudulent Practices inHousing Finance

Shillong January 30 - 31,2014

38

16. Rural Housing Finance Chhattisgarh RajyaGramin Bank

Raipur February 06 -07,2014

25

17. RHF Odisha Gramya Bank Bhubaneswar February 20 - 21,2014

24

18. Risk Management & Asset LiabilityManagement

Ahmedabad February 27- 28,2014

31

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

Total Participants 797

139


Operations and Performance of HousingFinance Institutions

Chapter 5

Housing Finance Companies (HFCs), specialized lending institutions for housing, registered withNHB were one of the major players in the mortgage market in India. As on March 31, 2014, there were58 HFCs registered under Section 29A of the National Housing Bank Act, 1987. They had a network of2,510 branches and other offices spread across the country. In addition, few HFCs had theirrepresentative offices for liaison work, in abroad.

The growth in outstanding housing loan portfolio of HFCs was encouraging, with an annual increaseof 20 per cent during the year 2013-14. The HFCs' market share was approximately 35 per cent of theretail housing finance market. The Directions/Policies Circulars/ Guidelines issued by NHB for theHFCs on issues pertaining to requirements of Net Owned Fund, Capital Adequacy Ratio, Loan to ValueRatio, Assignment of Risk weights and Provisioning, Know Your Customer andAnti Money Laundering,etc., have been intended to ensure sound growth of HFCs and development of housing finance sector onsustainable lines. Someof thekeyhighlights ofHFCs would include the following-

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 to2,510 as on 31-03-2014.

Total outstanding loan portfolio as on 31-03-2014 was 463,942 crore, with an annual growthof 18.89%.

Total outstanding housing loan portfolio as on 31-03-2014 was 347,858 crore, with an annualgrowth of 19.77%.

Total outstanding non-housing loan portfolio as on 31-03-2014 was 116,084 crore, with anannual growth of 16.33%.

Share of outstanding housing loans to outstanding total loans was increased to 74.98% as on31-03-2014 from 74.43% as on 31-03-2013.

Share of outstanding non-housing loans to outstanding total loans was marginally decreased to25.02% 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 ason 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 annualgrowth of 19.04%.

Outstanding Public Deposits as on 31-03-2014 were 51,981 crore, with an annual growth of17.66%.

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140

5.1 Number of Housing Finance Companies

Graph11: Classification of Registered Housing Finance Companies

5.1.1 As on 31-03-2014, 58 HFCs were granted the Certificate of Registration (CoR) under Section 29Aof the National Housing Bank Act, 1987. Of these, 40 HFCs were given the CoR withoutpermission to accept public deposits. Out of 58 HFCs, 50 were public limited companies and 8were private limited companies. In 2013-14, Certificates of Registration have been granted tocompanies namely Capital First Home Finance Private Limited and Viva Home Finance Limited.

5.1.2 Branches/ Offices Network of the HFCs

Graph 12: State/ Union Territory-wise Branches/Offices of Registered 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%.

Public Limited Companies Private Limited Companies60

50

40

30

20

10

0

31-03-2012 31-03-2013 31-03-2014

450

400

350

300

250

200

150

100

50

0

31-03-2013 31-03-2014

141

Chapter-5 Operations and Performance of Housing Finance Institutions


5.2 Financial Profile of HFCs

Table 26: Trend in Key Financial Indicators of HFCs for the last three years

5.2.1 Financial year for the HFCs registered with NHB is from April 01 to March 31, and the dataprovided under this Chapter was as on March 31, 2014.

(Amount in crore)`

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 1.49per cent from the preceding year. Public Deposits of HFCs grew by 18%, that is, from 44,179crore at the end of March, 2013 to 51,981 crore at the end of March, 2014. Trend analysis onoutstanding resources data of HFCs revealed that HFCs raised about one third of resources frombanks through borrowings and subscription to debentures, and the debentures subscribed byothers 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.

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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

0.48 0.45 - 0.59 -

1.23 1.11 - 1.14 -

3,01,681 3,90,217 29.35 4,63,942 18.89

2,22,225 2,90,427 30.69 3,47,858 19.77

35,476 44,179 24.53 51,981 17.66

37,103 51,027 37.53 51,785 1.49

34,658 48,019 38.55 55,179 14.91

5,403 5,541 2.55 6,014 8.54Paid up Capital

Free Reserves

Net Owned Fund (NOF)

Public Deposits

Outstanding Housing Loans

Outstanding Total Loans

GNPA as Percentage of O/s TotalLoans

NNPA as Percentage of O/s TotalLoans

Particulars 2012 2013 Growth%

2014 Growth%

142


5.2.3 Housing loan outstanding with HFCs as at the end of March, 2013 were 290,427 crore, and it wasincreased to 347,858 crore as at the end of March, 2014, thereby shown a growth of about 20 percent as on March 31, 2014. Share of loan of HFCs was the highest amongst all loan assets of HFCsin three years i.e. 68,70 and 70 percent, respectively. The investment percentage to total assetswere the least in HFCs asset. Aggregate investments of HFCs stood at 34,228 crore as on March31, 2014 as against 27,176 crore as on March 31, 2013, thereby registering an increase of 25.95per cent.

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Graph 14: Trend in OutstandingAssets of HFCs for the last three years

5.3 Key Performance Indicators of HFC

5.3.1

Table 27: Trend in Performance of Public and Private Ltd. HFCs for the last three years

Key financial parameters of Public and Private Ltd. shown that Public Limited HFCs were thedominant player in the market.

(Amount in crore)`

Housing Loans

Investments

Other Loans & Advances

Particulars 2011 &12 2012 &13 2013 &14

PublicLtd.

PrivateLtd.

Total PublicLtd.

PrivateLtd.

Total PublicLtd.

PrivateLtd.

Total

Paid upCapital

5,239 164 5,403 5,367 174 5,541 5,879 135 6,014

Free Reserves 34,620 38 34,658 47,911 108 48,019 55,021 158 55,179

Net OwnedFund (NOF)

36,912 191 37,103 50,760 267 51,027 51,502 283 51,785

PublicDeposits

35,476 --- 35,476 44,179 --- 44,179 51,981 --- 51,981

OutstandingHousingLoans

2,22,082 143 2,22,225 2,90,001 426 2,90,427 347,376 482 3,47,858

143


As on March 31, 2014, 18 HFCshad the Certificate of Registration with permission to accept public deposits. The key financialparameters of HFCs for the past three years were provided in the following table on the basis ofclassification into public deposit accepting and non-public deposit accepting HFCs.

(Amount in crore)`

5.3.2 On the basis of Public Deposit accepting and non-accepting:

Table 28: Trend in Performance of Public Deposit accepting HFCs with Non-acceptingHFCs for the last three years

As on March 31,2014, there were five HFCs sponsored by Commercial Banks and one HFC sponsored by a multi-state co-operative Bank, the details of which are given below :

Can Fin Homes Ltd., sponsored by Canara BankCent Bank Home Finance Ltd., sponsored by Central Bank of IndiaICICI Home Finance Company Ltd., sponsored by ICICI Bank Ltd.Ind Bank Housing Ltd., sponsored by Indian BankPNB Housing Finance Ltd., sponsored by Punjab National BankREPCO Home Finance Ltd., sponsored by REPCO Bank, which is a multi-stateco-operative Bank.

Key financial parameters of HFCs classified on the basis of Commercial Banks and Multi-State Co-operative Banks sponsored HFCs, and Other HFCs shows the dominant position ofother HFCs, compared to sponsored HFCs.

( Amount in crore)`

5.3.3 Commercial Banks and Multi-State Co-operative Bank Sponsored HFCs:

Table 29: Trend in Performance of Sponsored HFCs with other HFCs for the last three years

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Particulars As on 31-03-2012

SponsoredHFCs

OtherHFCs

Total SponsoredHFCs

OtherHFCs

Total SponsoredHFCs

OtherHFCs

Total

Paid upCapital

1,226 4,177 5,403 1,262 4,279 5,541 1,282 4,732 6,014

FreeReserves

1,311 33,347 34,658 1,931 46,088 48,019 2,465 52,714 55,179

Net OwnedFund (NOF)

2,331 34,772 37,103 3,005 48,022 51,027 3,536 48,249 51,785

PublicDeposits

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

As on 31-03-2013 As on 31-03-2014

Particulars As on 31-03-2012

No

n-D

ep

osi

tacc

ep

tin

gH

FC

s

Total

Dep

osi

tacc

ep

tin

gH

FC

s

No

n-D

ep

osi

tacc

ep

tin

gH

FC

s

Total

Dep

osi

tacc

ep

tin

gH

FC

s

No

n-D

ep

osi

tacc

ep

tin

gH

FC

s

Total

Paid upCapital

4,324 1,079 5,403 4,072 1,469 5,541 4,138 1,876 6,014

FreeReserves

33,075 1,583 34,658 42,192 5,827 48,019 48,239 6,940 55,179

Net OwnedFund (NOF)

34,545 2,558 37,103 44,056 6,971 51,027 43,772 8,013 51,785

PublicDeposits

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

Dep

osi

t

acc

ep

tin

gH

FC

s

As on 31-03-2013 As on 31-03-2014

144


5.4 Borrowing Profile of HFCs

Table 30: Trend in Composition of Borrowings of HFCs for the last three years

Paid- up capital of the HFCs (including the preference share capital which is compulsorily convertibleinto 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 theNet Owned Funds of the HFCs i.e. from 51,028 crore as on 31-03-2013 to 51,785 crore as on 31-03-2014. HFCs dependency was observed on loans from banks and financial institutions ,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.

` `

` `

`

and debentures

(Amount in crore)

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 thebanking 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 31-03-2014, thereby registering a growth of 17.23 per cent. The outstanding public deposits with the HFCsregistered an increase of 17.66 per cent i.e. from 44,179 crore as on 31-03-2013 to 51,981 crore as on31-03-2014.

Outstanding public deposits with HFCs showed an increasing trend during the year 2013-14. As on 31-03-2014, public deposits over 1,00,000 accounted for maximum with a share of 85.48 per cent of thetotal public deposits. The trend in size-wise outstanding public deposits at the end of last three years isshown in the Chart below. It was observed that major HFCs viz. Housing Development FinanceCorporation Ltd., Housing & Urban Development Corporation Ltd., Dewan Housing FinanceCorporation Ltd., PNB Housing Finance Ltd., Gruh Finance Ltd, Sundaram BNP Paribas Home FinanceLtd., LIC Housing Finance Ltd., etc. mobilized significant amount of public deposits during the year2013-14.

` `

`

`

` `

`

`

5.5 Public Deposits with HFCs

Particulars 2011 -12 2012 -13 2013 -14

As on31-03-2012

As on31-03-2013

As on31-03-2014

National Housing Bank 10,641 15,863 49% 19,376 22%

Foreign Government, ForeignAuthority and Foreign Citizen orPerson

1,801 1,059 -41% 3,314 213%

Banks 100,663 104,236 4% 128,407 23%

Debentures secured by mortgage ofimmovable properties or convertibledebentures

96,032 141,257 47% 169,015 20%

i. Of the above,ii. debentures subscribed by

banks

22,821 35,526 56% 40,795 15%

iii. debentures subscribed byothers

73,210 105,731 44% 128,220 21%

iv. Others 32,183 47,553 48% 49,466 4%

v. Public Deposits 35,476 44,179 25% 51,981 18%

Growth overpervious

year

Growth overpervious

year

145


Graph 15 : Trend in Size-wise Public Deposits of HFCs for the last three years

As on 31-03-2014, 84.44 per cent of the total public deposits held by the HFCs were in the interestrate slab of 9 to 11 per cent per annum. HFCs had 10.42 per cent of public deposits in the interestrate slab of 6 to 9 per cent per annum, which showed the decline over previous year. The slab ofinterest rate of 13 per cent and above had the least share of public deposits during the last threeyears.

5.5.1 Interest rate-wise Public Deposits of HFCs:

Graph 16: Trend in Interest rate-wise Public Deposits of HFCs for the last three years

5.5.2 Maturity-wise Public Deposits of HFCs:

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

Free of interest

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%

(Am

ount

incr

ore

)`

Upto Rs. 5000

Rs. 25,001 to Rs. 50,000

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

(Am

ount

incr

ore

)`

146


Graph 17 : Trend in Maturity-wise Public Deposits of HFCs for the last three years

5.6 Asset Profile of HFCs

5.6.1 Outstanding Loans andAdvances, and Investments of HFCs

Table 31: Trend in Outstanding Loans & Advances, and Investments of HFCs for the lastthree years

Asset profile of HFCs mainly comprises of housing loans, other loans and investments, and theoutstanding amount at the end of March 31, 2014 was 4,98,170 crore. In 2013-14, housing loanscontributed 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 profilewith a share of about 23%, and the investments share was on a increasing trend, and had only about 7% ofthe total assets of HFCs in 2013-14.

`

(Amount in crore)`

ther loans and advances outstanding stood at 116,084 crore as on 31-03-2014, ascompared to 99,790 crore as on 31-03-2013, with a growth rate of 16.33 per cent per annum. Theoutstanding 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 27,176crore as on 31-03-2013, with an increase of 25.95 per cent per annum.

HFCs' o `

` `

`

Particulars/As on 31March 2012 2013 Growth % 2014 Growth %

Housing Loans 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

Total 3,28,078 4,17,393 27.22 4,98,170 19.35

More than 84 months

84 months

More than 60 months but less than84 months

60 months

48 months or more but less than 60months



Less than 12 months

Repayable on demand or on notice

(Am

ount

incr

ore

)`

147


5.6.2 Housing Loans of HFCs

Table 32: Comparison of Housing Loans with Total Loans of HFCs as on March 31

Outstanding housing loans of all registered HFCs was 347,858 crore as on 31-03-2014, and sawa growth of 20 per cent per annum, compared to 290,427 crore as on 31-03-2013. The percentageof outstanding housing loans to total loans was at 73.66% per cent and 74.43 per cent as on March31, 2012 and March 31, 2013 respectively, which marginally increased and maintained at 74.98per cent, as on March 31, 2014

`

`

(Amount in crore)`

5.6.3 Maturity pattern of Housing Loans of HFCs

Graph 18: Trend in Maturity-pattern of Outstanding Housing Loans to Individuals byHFCs

Analyzing the trend on the maturity pattern of housing loans outstanding to Individuals withHFCs, it was observed that around 97% of these housing loans were had the maturity of above 7years. 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.

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 thataround 78% of their housing loans were to individuals, 16% to builders and 6% to corporate bodies andothers. This indicates that HFCs main service concentration of housing loan was individuals.

300000.00

0.00

50000.00

100000.00

150000.00

200000.00

250000.00

Up to 1 year 1 to 3 years > 3 to 5 years > 5 to 7 years Above 7 years

(Am

ount

incr

ore

)`

Individual Housing Loan Tenor

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

Housing Loans to Total Loans 73.66% 74.43% -- 74.98% --

148


Graph 19: Trend in Disbursements of Housing Loans by HFCs for the last three years, based onCategory of the Borrowers.

(Amount in crore)`

5.7.1 Trend in disbursements of housing loans to individuals by HFCs for the last three years,based on purpose of utilization.

Graph 20: Trend in Disbursements of Housing Loans to Individuals by HFCs for the lastthree years, based on purpose of utilization.

Analysis of purpose-wise HFCs disbursements of housing loans given to individuals revealed thatabout 74% of the loans disbursed were for acquisition/ construction of new houses, 2% for up-gradation including major repairs, and the balance 24% for old/existing houses (resale). Thisshowed that new assets creation were the main activity of the borrowers from the housing loansdisbursed by HFCs.

Housing Loans to Individuals

Housing Loans to Builders

Housing Loans to Corporate Bodies and Others

0

10000

20000

30000

40000

50000

60000

70000

80000

2011-2012

Upto Rs. 2 lakh

>Rs. 2 lakh and upto Rs. 5 lakh




>Rs. 25 lakh

Existing HousesUpgradationNew Houses Existing HousesUpgradationNew Houses Existing HousesUpgradationNew Houses

Category-wise Disbursement Trend on Housing Loans by HFCs

2012-2013 2013-2014

Am

ou

nt

in

cr

ore

`

149


Particulars 2012-13 Growth % Growth %

Upto ` 2,00,000 248 369 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 20,971 31,291 49.21 37,281 19.14

Total (1) 48,666 67,072 37.82 76,702 14.36

2011-12 2013-14

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/existinghouses (resale). The segregated and consolidated details are captured in the tables .

`

(Amount in crore)`

Table 33: Trend in Disbursements of Housing Loans of HFCs to individuals for the last threeyearsAcquisition/Construction of New Houses

Table 34: Trend in Disbursements of Housing Loans by HFCs to Individuals for the lastthree years Upgradation (including major repairs) (Amount in crore)`

Particulars 2011-12 2012-13 Growth % 2013-14 Growth %

Upto `2,00,000 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

Above ` 25,00,000 89 136 52.81 152 11.76

Total (2) 1,795 2,185 21.73 2,402 9.93

Table 35: Trend in Disbursements of Housing Loans by HFCs to Individuals for the lastthree yearsAcquisition of Old/Existing Houses (Resale) (Amount in crore)`

Particulars 2011-12 2012-13 Growth % 2013-14 Growth %

Upto `2,00,000 18 21 16.67 28 31.08

Above ` 2,00,000 and upto ` 500,000 259 311 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

Total (3) 17,760 23,331 31.37 24,953 6.95

150


Size of HousingLoan

Income < `

5,000 p.m.Income ` 5,001 to

` 10,000 p.m.Income > ` 10,000

p.m.Total

No. Amt No. Amt No. Amt No. Amt

Upto ` 3 lakh 1196 8 22662 179 63493 904 87351 1092

> ` 3 lakh and

upto ` 5 lakh

116 1 1034 28 50898 1696 52048 1725

Total 1312 10 23696 207 114391 2600 139399 2817

Particulars Growth % Growth %

Upto `2,00,000 362 505 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

2011-12 2012-13 2013-14

(Amount in crore)`

Table 36: Trend in Total Disbursements of Housing Loans by HFCs to Individuals for the last threeyears

Out of total housing loan disbursements of 1,04,057 crore to individuals in 2013-14, 2,817 crore wasdisbursed towards housing loan upto 5 lakh, which contributed to 2.71 per cent of the total. From thecompilation of submitted information, it was observed that out of 2,817 crore disbursed in the categoryof slab of housing loan upto 5 lakh, 10 crore, 207 crore, and 2,600 crore were disbursed to thecategory of borrowers having income of upto 5,000, 5,001 to 10,000 and more than 10,000,respectively.

` `

`

` ` ` `

` ` ` `

`

(Amount in crore)`

Table 37: Disbursements of Housing Loans by HFCs to Individuals in 2013-14, as per IncomeCategory

NHB has also compiled the State/ UT-wise data on housing loans to Individuals and Builders, ondisbursement 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 RuralCategories. (Amount in crore)`

Particulars 2012-13 2013-14

TotalState/UT Urban Rural Total Urban Rural Total

Andhra Pradesh 7,226 1,014 8,240 7,502 1,024 8,526 3.47

Andaman and Nicobar - - - - - - -

Arunachal Pradesh - 0.68 0.68 5 0.78 6 750.00

Assam 296 8 303 326 2 328 8.25

Bihar 188 3 192 208 5 213 10.94

Chandigarh 382 19 401 340 3 343 -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

Delhi 4,074 110 4,184 3,359 192 3,551 -15.13

Goa 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 2 28 34 3 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

Lakshadweep - - - - - - -

Madhya Pradesh 2,251 281 2,532 2,652 342 2,994 18.25

Maharashtra 19,790 4,227 24,017 24,672 4,634 29,306 22.02

Manipur 0.79 8 9 33 4 37 311.11

Meghalaya - - - - - - -

Mizoram 0.29 7 7 7 17 24 242.86

Nagaland 0.05 - 0.05 1 - 1 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

Sikkim 51 0.91 52 62 0 62 19.23

Tamil Nadu 11,501 1,904 13,405 11,694 2,100 13,794 2.90

Tripura - - - - - - -

Uttar Pradesh 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

Total 78,729 13,859 92,589 87,957 16,100 104,057 12.39

% Growth in

Islands

152


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.

Picture 2A – Trend in HFCs Disbursements of Housing Loans to Individuals

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 bluecategory.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 categorywhile Bihar has moved down from green to white category.

154


Trend: All the states and Union territories have maintained consistency.

Picture 4 – Trend in HFCs Disbursements of Housing Loans Acquisition/ Construction of New Houses toIndividuals

155


Institutional performance viz-a-vizHousing Finance

CHAPTER 6

6.1 Categories of Institutions Providing Housing Finance

6.2 Scheduled Commercial Banks and their Performance in Housing Finance

The housing finance industry today comprises of banks, HFCs and cooperative institutions. NHB was setup at a time when housing finance as a product was in its infancy, and the economy itself was on thethreshold of change. From its early years, amid rapidly changing market dynamics, attendant onliberalization and deregulation, NHB had to steer a nascent sector through the transition phase to acompetitive, dynamic and market oriented phase. The policy and regulatory framework of NHB hasconsistently encouraged the industry to adopt market based solutions with due regard to affordability andstability. 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 ofinstitutions:

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. Housing Finance Companies

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 thehousing loans outstanding in the formal housing market accounted for nearly 61%. The share of Bankscan be attributed to extensive network and broad customer base, access to stable low-cost funds and otherregulatory mandates. However, the share of growth of HFCs can be one indicative of the strength of theirfocused approach, targeting of special customer segments, relatively better customer service, etc.

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

`

`17

17Sectoral Deployment of bank Credit-March 2014

156

Table 39: Trend in Outstanding of SCBs for the last two yearsHousing Loans(Amount in crore)`

Details March, 2013 March, 2014 Year on YearGrowth (%)

Gross Bank Credit 49,64,177 56,57,231 13.96Housing Loans(Priority & Non Priority)

4,56,665 5,40,819 18.43

Out of which Housing Loans(Priority)

2,67,203 3,03,400 13.55

6.2.1 Credit towards Rural and Urban Housing

Table 40:Area-wise Outstanding Housing Loans of SCBs, as on March 31, 2013

(Amount in crore)`

SCBs through their vast network of branches make disbursements of housing loans to borrowers.However, as reflected below, rural and semi urban areas wheremajority of the population resides. Contrarily, SCBs share of metropolitans in the total bank creditis almost 50 per cent, showing the concentration and area preference by SCBs forhousing loans. The factors attributing to low credit distribution of housing credit in rural and semiurban areas may be high transaction cost, lack of proper titles, lack of collateral, large unorganizedsector and low income households.

they still have small reach in

servicing

Area Outstanding Percentage to totalRural Area 2,53,538 6.69

Semi Urban Area 6,03,634 15.94

Urban Area 10,19,677 26.92Metropolitan Areas 19,10,585 50.45

Total 37,87,434 100.00

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 theparticular Bank. The loans are given for longer gestation period. As may be observed from thetable below, it is evident that the SCBs were extending maximum housing finance in the range of9-13 per cent interest rate per annum. Some Banks extend housing loans at lower interest ratesunder special schemes of refinance from NHB and other mandatory lending such as prioritysector.As shown below in the table, 93 per cent of housing loans were disbursed at a rate of interestlower than 13 per cent.

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

157


Source : Banking and Statistical Returns by RBI as on March 31,2013 – Published on October 28, 2014

Table 41: Classification of outstanding Housing Loans of SCBs, as per Rate of Interest

6.2.3 Details of Housing Loans by Public Sector Banks

Table 42: Comparison of PSBs Housing Loans for the last two years

NHB is collecting the slab-wise Housing Loan data from Public Sector Banks on quarterly andyearly 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 socaptured consists of attributes like total housing loans disbursed during the quarter, housing loansoutstanding 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 at3,75,090 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.

` ` `

` ` ` ` `

`

`

(Amount in crore)`

Details 2012 2013 Growth(%)

Total Disbursement ofHousing Loans

71,857 98,787 37.48

Total Outstanding ofHousing Loans

3,11,982 3,75,090 20.21

Rate of Interest (Percentage) Loan outstanding of SCBs(Amount in crore)`

Percentage of total

Less than 6 3045.79 0.66

6 % to less than 9% 28,937.48 6.23

9 % to less than 10 % 49,216.26 10.59

10 % to less than 11 % 1,94,452.80 41.84

11 % to less than 12 % 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

14 % to less than 15 % 8,495.45 1.83

15 % to less than 16 % 5,141.04 1.11

16 % to less than 17 % 2,329.89 0.50

17 % to less than 18 % 840.95 0.18

18 % to less than 20 % 549.87 0.12

20 % and above 74.23 0.02

Total 4,64,711.20 100.00

158


Table 43: Trend in Slab-wise Housing Loans of PSBs for the last two years

Loan ( )`

Slab- wise Housing FY 2012-13FY 2013-14

(Amount in crore)`

Disbursed O/S NPA (%) Disbursed O/S NPA (%)

Upto 2 Lakh 2,957 6,165 11.52 1,883 5,801 10.57

4,028 36,659 4.48 3,768 33,991 3.34

11,281 69,436 3.01 12,464 74,866 1.79

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 above25 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'

Graph 21: Trend in Outstanding Housing Loans of PSBs

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%

Per

cen

tag

eto

tota

l

6.3 The National Co-operative Housing Federation of India18

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

18National Cooperative Housing Federation

159

Above 10-25 Lakh

Above 5-10 Lakh

Above 2-5 Lakh


(Amount in crore)`

Table 45: Trend in Housing Loan Disbursed and Units Constructed by ACHFs: (State Wise)for the last three y ears

The cooperative housing structure consists of primary housing cooperatives at the grass root Leveland Apex Cooperative Housing Federations. The National Cooperative Housing Federation ofIndia (NCHF) is the nationwide organization of the Indian Cooperative Housing Movement. Thebasic thrust of its formation was to have an organization at the national level to assume theResponsibility of promoting, developing and coordinating the activities of housing cooperativesin the country. These Federations have so far disbursed 12128.62crore to primary housing co-operatives for construction of dwelling units for their members.

`

(Amount in crore)`

Table 44: Trend in Borrowings, Sanctions and Disbursements of Apex Cooperative HousingFederations (Cumulative) for the last three years

Type

Amount Borrowed 10,755.40

Loan Sanctioned 12,574.47

Loan Disbursed 12,128.62

2011-12 2012-13 2013-14

10,689.16

12,430.43

11,971.21

10,555.28

12,063.36

11,571.71

State 2013-142012-132011-12

AmountUnitsConstructed/Financed



Andhra Pradesh

Assam

Bihar

Chandigarh

Delhi

Goa

Gujarat

Haryana

Himachal Pradesh

Jammu & Kashmir

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Manipur

Meghalaya

OdishaPondicherry

Punjab

Rajasthan

Tamil NaduUttar Pradesh

West Bengal

Total

n.a.n.a.

-

n.a.

67.34

2.63-

1.28

1.18n.a.

1495

66.61

n.a.

-

n.a.

n.a.

-

3.30n.a.

0.13n.a.

-

-

157.41

n.a.

815-

n.a.

n.a.

26-

840

n.a.n.a.

139

18,940

n.a.

-

n.a.

n.a.

-

43n.a.

4n.a.

-

-

20,807

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

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

160

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 localparticipative 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 MicroFinance Institutions as an important channel for delivering housing finance to the unserved section ofsociety and accordingly developed a suitable Housing Microfinance Scheme for them. NHB in itsendeavour to provide housing to the unserved segments of the society pioneered a Housing MicroFinance (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/sanitationunits. The Housing Microfinance Programme of NHB is spread across 11 states which include AndhraPradesh, Karnataka, Tamil Nadu, Maharashtra, Orissa, Gujarat, Kerala, Assam, Uttar Pradesh, WestBengal 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 takenup by MFIs for their members of Self Help Groups. These programmes form an integral part of the HMFprogramme of the Bank.

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Area of FocusSustainable Energy Efficient Housing

CHAPTER 7

7.1 Introduction

Globally, the building sector accounts for more electricity use than any other sector i.e., 42 per cent .With increasing urbanization, the number and size of buildings in urban areas will increase, resulting inan 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 economicgrowth. Cities contribute significantly to the growth of any country's economy. Indian cities contributeabout 60% to the country's gross domestic product (GDP), and by 2030, this percentage would increaseto 70. As per 2011 Census, about 31.16% (377 million) of India's population were residing in urbancenters. This percentage is expected to further increase to 40% by 2030. According to InternationalEnergy Agency (IEA), due to the swift urban sprawl and transformation of cities into economic hubs,India will see maximum growth in energy consumption till 2035 . It will be even more than China andover 6 times more than United States and 5 times more than Russia. Though the growth rate will behighest, 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 to8,52,900 GWh during 2012-13, showing a CAGR of 9.53%. The increase in electricity consumption is8.62% from 2011-12 (7,85,193 GWh) to 2012-13 (8,52,900 GWh) . Of the total consumption ofelectricity 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-yearpopulation of that year) increased from 3,497.59 KWh in 2005-06 to 6748.61 KWh in 2012-13, a CAGRof 8.56%. The annual increase in PEC for 2012-13 over 2011-12 was 8.76%.

19

20

21

19

20

21

United Nations Industrial Development Organization (UNIDO)report on Energy efficiency in buildings

EIA Annual Energy Outlook 2013

Energy Statistics 2014, released by MOSPI, GoI

1970

-71

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

1975

-76

1980

-81

1985

-86

1990

-91

1995

-96

2000

-01

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

2011

-12

2012

-13

Graph 22: Trends in Consumption of Electricity* in India GWh

162

Graph 23 : Sector-wise Consumption of Electricity (Utilities) during 2012-13

7.2 Energy Consumption in Residential Buildings

Grap 24 : Future trend of building sector in India

Building construction and its facility maintenance services consume a significant energy dependingupon its geographic location, design, type of construction and materials used and other facilitiesprovided. This is primarily because energy-intensive solutions are not sought while constructing abuilding and meeting its demands for cooling, ventilation, and lighting and at times for heating in earlierdays. In India, the vast differences - in residential habits of rural and urban, climatic zones, incomegroups requirements, construction practices, availability of variety of building materials etc. have led todifferent housing patterns, which influence energy consumption considerably. Particularly, urbanhousing and commercial complexes consume very high energy due to provision of comforts such asair-conditioners, lifts / escalators, pumping etc. Sustainable building utilizes environmentally consciousdesign 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. Theestimated consumption of electricity by residential building is shown in the graph below .

22

22Report on Constructing change: Accelerating energy efficiency in India's buildings market'

70000600005000040000300002000010000

0

Residential Commercial &Office

Hospitality Retail

20302005

Traction &Railways

Commercial

Domestic

Agriculture

Industry

In B

illi

on S

q.m

.

Chapter-7 Area of Focus: Sustainable Energy Efficient Housing

163


It is estimated that the total constructed built-up area would increase from 8 billion square meters in 2005to 41 billion square meters in 2030 (about 5-fold increase) . Out of this total estimated built-up area by2030, only 30% has been constructed. This situation is significantly different from the developedcountries, where bulk of the buildings is already constructed. This provides both challenges andopportunities to building sector stakeholders to develop this building stock appropriately. Energymanagement practices should be encouraged in the planning of buildings and the city form. Buildingsand city forms that are energy efficient and use sustainable energies like solar and wind energies shouldbe considered. There are fragments of evidences in India of settlements using solar power, waterrecycling techniques and waste management practices. But in general, the environment friendlytechniques are yet to be practiced in urban areas, especially in large cities where the differences would befelt. The environmental sustainability of housing is concerned with the impacts of housing on theenvironment 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 consumesapproximately 22% of the total electricity generated in India, which is about three times more than that ofthe commercial buildings. One of the reasons for this is that the built-up area of residential buildings isabout seven times more than that of commercial buildings. The energy use intensity of the residentialbuildings 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.

Several government and private programs may exist to advance building efficiency in India. CurrentGovernment policies, building rating systems and active stakeholders provide a foundation foraccelerating efficiency. Yet, as India's real estate market continues to grow, the current policy frameworkneeds to be further developed and implemented by all efficient stakeholders.

23

The implementation of energy efficiency measures and energy codes in buildings can help to ensure thatnew buildings use energy efficiently, and this can reduce building energy use by 50% or more comparedto buildings designed without energy efficiency measures . The implementation of energy efficiencymeasures into residential buildings cannot only help consumers save significant costs on their energyconsumption but also contribute towards environmental preservation and sustainability. Energyefficiency is the fastest, cleanest, and cheapest way to meet energy needs - India alone could save $42billion each year by largely improving energy efficiency in buildings . According to NRDC (2011), ifdevelopers across India Implemented standard energy efficiency measures in new construction andmajor 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 theCentral and State Government level, but, as yet, little has been done by way of mandating legalrequirements to that effect. In certain States, Governments are encouraging green buildings but not so farwith any mandatory standards except for large projects. The Government of India has introduced thenecessary standards, organizations to provide guidelines, technical and financial assistance for effectiveimplementation of energy conservation in buildings. Towards energy improvement, the Government ofIndia enacted the followingActs Codes:

The Act provides for the legal framework, constitutionalarrangement and a regulatory mechanism at the Central and State level to embark upon energy

24

25

7.3 Towards achieving energy efficiency

� Energy Conservation Act, 2001:

Report on Constructing change: Accelerating energy efficiency in India's buildings market'23

24

25

UNEP SBCI Report on Buildings and Climate Change: Summary for Decision-Makers

NRDC & ASCI (2011), Saving Energy: Taking Building Efficiency to New Heights

164

efficiency drive in the country. There are short term and long term measures, which enforceimplementation of energy policies in phased manner.

Bureau of Energy Efficiency (BEE) operates complete pilotphase of programmes for energy efficiency in government buildings and prepare action plan forwider dissemination and implementation.

They undertake energy efficiency projects through third partyfinancing which enables the consumers to save on energy cost to a maximum extent.

Several changes are brought out in the recently revisedNational Building Code with respect to energy conservation. Classification of climatic zones,more details on lighting and ventilation, density norms, use of solar energy, extending energyconservation measures to commercial buildings etc. are the provisions provided.

The Energy Conservation Building Code (ECBC),developed by the Bureau of Energy Efficiency (BEE), prescribes a minimum standard for energyuse in new and major retrofits of buildings. The connected load requirement for buildings tocomply 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 establishesminimum requirements for energy-efficient building design and construction.

The National Action Plan on Climate Change(NAPCC) was released by Honourable Prime Minister of India in June, 2008, outlining existingand future policies and programs addressing climate mitigation and adaptation. The Planidentifies eight core "national missions" running through 2017 including the National Mission onSustainable Habitat, which seeks to promote sustainability of habitats through improvements inenergy efficiency in buildings, urban planning, improved management of solid and liquid waste,model shift towards public transport and conservation through appropriate changes in legal andregulatory framework and the National Mission on Enhanced Energy Efficiency (NMEEE) anddirects ministries to submit detailed implementation plans to the Prime Minister's Council onClimate Change by December 2008. Emphasizing the overriding priority of maintaining higheconomic growth rates to raise living standards, the plan "identifies measures that promote ourdevelopment objectives while also yielding co-benefits for addressing climate changeeffectively." It says these national measures would be more successful with assistance fromdeveloped countries, and pledges that India's per capita greenhouse gas emissions "will at no pointexceed that of developed countries even as we pursue our development objectives." Para 4.2 of theNationalAction Plan on Climate Change mandates:

A market based mechanism to enhance cost effectiveness of improvements in energyefficiency in energy-intensive large industries and facilities, through certification ofenergy savings that could be traded. (PerformAchieve and Trade)

Accelerating the shift to energy efficient appliances in designated sectors throughinnovative measures to make the products more affordable. (Market Transformation forEnergy Efficiency)

Creation of mechanisms that would help finance demand side management programmesin all sectors by capturing future energy savings. (Energy Efficiency Financing Platform)

Developing fiscal instruments to promote energy efficiency (Framework for EnergyEfficient Economic Development)

Further, during the 11th Five Year Plan, the Bureau of Energy Efficiency (BEE) had

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Bureau of Energy Efficiency, 2002:

Energy Saving Companies:

National Building Code (Revised) 2005:

Energy Conservation Building Code:

National Action Plan on Climate Change:


165


introduced standards and labelling programme for 13 household appliances. The labelswere made mandatory for four appliances, namely, frost-free refrigerators, room air-conditioners, tube lights, and transformers. It is estimated that the standards and labellingprogramme had avoided an installed capacity of 7500 MW during the 11th Plan.

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 inmanufacturers to invest in the development, manufacturing, and marketing of theseproducts, which otherwise would be limited because of the higher upfront cost of theseproducts. The incentives will be gradually decreased with increase in sales and reductionof the product first cost. It is estimated that SEEP for efficient fans and lights alone willavoid 1500 MW of installed capacity during the 12th Plan.

Energy efficiency in residential buildings is also promoted through various voluntarybuilding 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 ofpre-certified projects by the Ministry of Environment and Forests (MoEF) and additionalfloor area ratio FAR and tax incentives by some urban local bodies (ULBs) are alsoavailable.

National Housing Bank (NHB), through its "Promotional Programme for Energy Efficient NewResidential Housing in India" seeks to address the challenges associated with the implementation ofenergy efficient measures in residential buildings and promote the adoption of energy efficient measuresin residential buildings through a slew of measures.

KFW, the German Development Bank, is financing a Promotional Programme for Energy Efficient NewResidential Housing in India. This Programme was initiated jointly by NHB and KfW in 2008 pursuantto Indo - German Government-to-Government negotiations. Under the programme, a line of Credit ofEURO 50 million was provided to NHB for refinancing individual home buyer loans for new residentialhousing, meeting a minimum of 30% improvement in energy efficiency over the benchmark building incase of active measures and 18% improvement in case of passive measures. The focus of the programmeis on typical, middle income apartment developments.

The objective is the successful implementation of a "Promotional Programme for Energy Efficient NewResidential Housing in India", which would contribute to a sustainable energy supply by encouragingthe use of energy efficient technologies and building methods (energy efficient design, energy efficientheating, 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 CO 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 bemade available to Primary Lending Institutions (PLIs) viz. Banks and Housing Finance Companiesunder a Refinance Scheme developed for the Programme. With respect to future development, trainingand capacity building under the Programme, a 'Facilitator' has been appointed. The facilitator isresponsible for overall coordination with Primary Lending Institutions and building developers fordeveloping initial pipeline for identification/development of ready building projects in order to ensureearly utilization of funds available under the Programme. For facilitating the calculation of potentialenergy savings by a household under the Programme, a very simple and ready-to-use assessment toolhad been specifically developed by Fraunhofer IBP, Germany and TERI, who were engaged as external

2

�

7.4 Steps taken by NHB

166

experts. IT-toolkit calculates the energy need of a building as a whole and the potential savings offered byactive and passive energy efficiency measures based on the building design. The IT toolkit allows theuser to enter data regarding the parameters of the building project being assessed, key features of thebuilding envelope such as geometry, orientation and building materials, and data on the technologiesused for space cooling, heating, lighting and hot water.

Besides information on the national benchmark regarding energy use in the residential sector in India, thetoolkit includes case studies on energy efficient residential buildings and provides information on selectenergy efficiency technologies. Based on the level of energy savings by way of adoption of variousenergy efficient parameters (active and passive measures), an initial certification is provided to thepotential individual borrowers for use in the loan procurement process. The certification andaccreditation for projects under the Programme are provided by Fraunhofer, IBP and TERI. This IT-toolkit is available under public domain and can be accessed through the NHB-KfW Homes EE Programwebsite http://www.ee-homes.com/

Further, NHB's Refinance Scheme for Installation of Solar Water Heating and Solar LightingEquipments in Homes, to promote use of solar equipment in the domestic context has till date directlyimpacted the life of more than 16,000 underserved households.

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 tothe project which helps attracting customers in the highly competitive residential housingmarket.Cost-free advisory services and training for energy efficiency measures.Get access to our easy-to-use IT-toolkit ResBuild to calculate energy savings.

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.

Low energy, waste disposal and water costBenefits 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.

Everyone benefits from energy efficiency in buildings, from workers and landlords to tenants and civilsociety. Identifying the groups responsible for the successes of, and obstacles to, energy efficiency iscritical to building a roadmap with targeted actions for each stakeholder to capitalize on the opportunityto save energy. But the challenges associated with the implementation of energy efficient measures in

7.5 Benefits to various Stakeholders under the Programme are -

Benefits to Occupants / End users

7.6 Building Energy Efficiency

Benefits for Building Developers

Benefits for PLIs and HFCs

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residential buildings are many and varied. There is lack of awareness regarding the technical andfinancial potential of energy efficient solutions on the part of end-users. The limited availability and highcosts 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 efficiencymeasures may inflate their purchase consideration. From the technical aspect, it cannot be ignored thatspecialists like architects and energy auditors lack sufficient expertise in this area of work as it is still in anascent stage. Moreover, technical standards and calculation tools have not been widely introduced tosupport implementation and adoption. From the legal perspective, much needs to be done with respect tothe development and propagation of energy efficiency codes for buildings in the country and mandatetheir legal requirement.

India's economic growth can only be sustained with corresponding to growth in infrastructure. Presentlythe 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 urbaninfrastructure, which will further require newer green and sustainable techniques for building thisinfrastructure. These newer techniques encapsulate the foundation of green buildings. Energyconsumption and associated greenhouse gas emissions will continue to rise unless actions to direct theconstruction industry towards sustainable consumption and production are urgently taken. The objectiveof sustainable development is to reduce the baseline energy consumption through adoption andimplementation of efficiency measures in buildings, by the use of energy efficient passive and activetechniques.

Compact Energy efficiency is a growing policy priority for many countries around the world. It is widelyrecognized as the most cost-effective and readily available means to address numerous energy-relatedissues, including energy security, the social and economic impacts of high energy prices and concernsabout climate change. At the same time, energy efficiency increases competitiveness and promotesconsumer welfare.

All the stakeholders viz. the Central and State Governments by way of setting standards for the bottom ofthe buildings market and supporting the top of the market to accelerate energy efficient construction. Thereal estate developers and the Financial institutions need to work together to make the concept of Energyefficiency more affordable and sustainable. The recent launch of three landmark initiatives for EnergyEfficiency by the Government of India viz., "Design Guidelines for Energy Efficient Multi-StoreyResidential Buildings and Star Ratings for Diesel Gensets and for Hospital Buildings" are supposed toencourage all stakeholders to take part in the implementation energy efficiency initiatives.

26

Box 6 : Design Guidelines for Energy-efficient Multi-storey Residential Buildings by BEE -Recommendations on energy-efficiency features for consideration at the design stage ofmulti-storey residential buildings

1. Building massing and spatial configuration

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The six sections under which these recommendations are featured in are:

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

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)26

168


exposure on walls during summer months

Recommendation 4: Incorporate passive design measures for walls and windows forreduced energy consumption and improved thermal comfort

Recommendation 5: Design for adequate day-lighting

Recommendation 6: Insulate the roof and provide reflective surface

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 ofevaporative 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 thekitchen

Recommendation 11: Select higher BEE star-labelled energy-efficient equipment andappliances

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

Recommendation 15: Incorporate energy-efficiency design features in the design of lifts

2. Building envelope

3. Space cooling

4. Appliances

5. Common services

6. Renewable energy integration

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169

Report on Trend and Progress of Housing in India 2014Chapter-7 Area of Focus: Sustainable Energy Efficient Housing

Way Forward

Chapter 8

House is pivotal for mankind's moral and substance development ever since the dawn of civilization. Adequatehousing is essential for human survival with dignity. There are many things that we would find difficult, if notimpossible to do without good-quality housing. Housing shortage is a universal phenomenon. It is more acute indeveloping countries. The housing dimension in India has been changing in recent years. India has initiatedmany reforms in housing that have taken many forms and manifestations characterized by the reduction insocial allocation, cutbacks in public funding and promotion of a real estate culture in close partnership betweenthe Government and private actors.

Since home life affects the very foundation of an individual's life, the house becomes an important part of it andhousing attains the top priorities for most people, regardless of their income levels. There has been increasingconcern 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 madegovernments more aware of the need to promote savings, reduce subsidies and mobilize domestic resources andmotivate the involvement of private financial institutions. Housing finance has risen to the top of research andpolicy 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 theincrease in level of urbanization from 27.81% to 31.16%. This growing concentration of people in urban areashas led to problems of land shortage, housing shortfall and congested transit and has also severely stressed theexisting basic amenities such as water, power and open spaces of the town and cities. According to the 201-census, the housing stock in urban India stood at 78.48 million for 78.86 million urban households. Through thegap between household and housing stock is narrowing, actual shortage is high due to a certain part of currentstock being dilapidated and people living in congested dwelling. There is a gap between the demand and supplyof housing (both in terms of quantity and quality) in urban India. India possesses the elements of very strongdemand 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'sgross domestic product (GDP) has been estimated at 6.3% in 2013 and the segment is expected to generate 7.6million jobs during the same period. It is also expected to generate more than 17 million employmentopportunities across the country by 2025 .

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 regulatoryframework of the regulators has consistently encouraged the industry to adopt market based solutions with dueregard to soundness, affordability and stability. The quality of assets in the mortgage industry is among the bestin the economy.

27

27Confederation of Real Estate Developers' Associations of India-, “Report on assessing the economic impact of India's

real estate sector - 2013

170

Retail housing finance is, today, available from a diverse set of institutions at competitive terms as the sector hasbecome increasingly demand driven. Facilitating and catalyzing the credit flow in the housing sector, NHB'senabling policies have supported the expansion in home ownership in the country. The number of housingfinance companies has grown over the years and was 59 in number at the end of June 30, 2014. NHB, throughthe years, has sought to perform its multiple roles in a mutually synergic manner, consistent with its Charter andhas endeavored to develop a sound, stable and sustainable housing finance system in the country. Introductionof new products, which connect the housing finance sector to the larger economy, is the emerging need of thesector. 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 Indiancontext, risk mitigation through Central Registry, title insurance, etc. With NHB's catalyzing role, the balancesheet 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 thelower income segments for their housing needs. This has resulted in a huge shortage of housing for thesesegments, and a multi-pronged effort is required to address the problem in all its dimensions. Among otherthings, the recently set up 'Credit Risk Guarantee Fund Trust for Low Income Housing', established by theGovernment of India and administered by NHB, is expected to leverage institutional financing for the smallerborrowers.

NHB through its refinance window provides the retail lending institutions with an economical and efficientsource of raising funds for their housing finance operations. Today, NHB offers a range of refinance productsaimed at fulfilling the needs of the various sub-segments of the market, from rural housing to urban low incomehousing, housing for women, energy efficient housing and solar lighting and water heating equipment. NHB isalso engaged in developing products for low and moderate income households. NHB is offering this product tothe primary lending institutions at concessional rates as an incentive for them to extend long term fixed rateloans 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 fortownships and settlements, approval of the Real Estate (Regulation and Development) Bill, 2013, setting up theUrban Housing Fund and impetus to Subsidy Schemes like the Rajiv Rinn Yojana have further lent strength tothe sector.

The recent budget announcements related to housing sector are very encouraging. With the allocation of8,000 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 mandatedto provide 'Housing for All by 2022'. With this objective the Hon'ble Finance Minister in his Budget Speechannounced the setting up of a Mission on Low CostAffordable Housing which will be anchored in the NationalHousing Bank. The Scheme will incentivize the development of low cost affordable housing. Similar Policy-based efforts like providing tax sops for the Real Estate Investment Trusts (REITs), as announced in the UnionBudget of 2014-15, could result in extracting new growth opportunities through Rental, Affordable and SeniorCitizen Housing projects that can increase the depth of the industry. REITs have been successfully used asinstruments for pooling of investment in several countries and such instruments will definitely attract long termfinance from foreign and domestic sources including the NRIs. REITs would reduce the pressure on the bankingsystem while also making available fresh equity.

Mortgages are the retail banking opportunity in an economy. The total mortgages in the books of the banks havegrown from 1.5 percent to 10 percent of the total bank advances in the last decade. The ratio of total outstandingmortgages to the GDP is currently around 9 per cent. If by 2020, this ratio were to reach 20 percent, a numbersimilar to that of China, we could expect the mortgage industry growing at an average rate of over 20 percentduring the next decade.

To enable the housing finance market to function more efficiently, there is a need for the adoption of uniformpractices by the housing finance industry relating to matters like appraisal and documentation, conversion of

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Chapter-8 Way Forward

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fixed rate loans into floating rate loans etc. A greater degree of transparency in dealings with the customers willenable 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. Themarket needs to be deepened and widened. Gaps are required to be filled in both supply and demand sides andcalls for innovations, orientation towards the un-served and under-served segments of the society.

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Abbreviations

CEO Chief Executive Officer

CERSAI Central Registry of Securitization Asset Reconstruction and SecurityInterest of India

CII Confederation of Indian Industry

CPWD Central Public Works Department

CRGFTLIH Credit Risk Guarantee Fund Trust for Low Income Housing

CTR Cash Transaction Report

DFI Development Finance Institution

ECBs External Commercial Borrowings

EEHRS Energy Efficient Housing Refinance Scheme

EMI Equated Monthly Installment

EWS Economically Weaker Section

ISHUP Interest Subsidy Scheme for Housing the Urban Poor

IT Information Technology

Jawaharlal Nehru National Urban Renewal MissionJNNURM

Know Your CustomerKYC

Local Area NetworkLAN

GDP Gross Domestic Product

GFD Gross Fiscal Deficit

GJRHRS Golden Jubilee Rural Housing Refinance Scheme

GoI Government of India

GRIDS Grievance Registration & Information Database SystemHFCs Housing Finance Companies

HFIS Housing Finance Institutions

HUDCO Housing and Urban Development Corporation Ltd

.

LIG Lower Income Group

MBS Mortgage Backed Security

MoHUPA Ministry of Housing & Urban Poverty Alleviation

NCHF National Cooperative Housing Federation of India

NHB National Housing Bank

NIPFP National Institute of Public Finance and PolicyPLIs Primary Lending InstitutionsPMLA Prevention of Money Laundering Act, 2002

PSBs Public Sector Banks

RRY Rajiv Rinn Yojana

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APL Above Poverty Line

BPL Below Poverty Line

CPI Consumer Price Index

NAC NotifiedArea Councils

NGOs Non-Governmental Organizations

NPA Non-PerformingAsset

MOU Memorandum of Understanding

MIG Middle Income Group

PPP Public Private Partnership

ARDBs Agriculture Rural Development Bank

ACHFs Apex Cooperative Housing Federations


USAID United States Agency for International Development

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ULBs Urban Local Bodies

RBI Reserve Bank of India

REITs Real Estate Investment Trusts

RHF Rural Housing FundRML Reverse Mortgage Loan

RMLA Reverse Mortgage Loan enabled Annuity

RO Regional Office

RRBs Regional Rural Banks

SCBs Scheduled Commercial Banks

SLCC State Level Coordination Committee

UCBs Urban Co-operative Banks

trends in housing finance in india

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