National Housing Bank and Home Loan Account Scheme and later developments

Established in July 1988, the National Housing Bank (NHB) is now engrossed in tackling the gigantic human problem of housing development on a long-term basis.  Promotion of a healthy finance system, and at the same time providing adequate finance to the housing sector, are the principal functions of the Bank.  Its message: ‘do not depend on the government, save for your house’ is rather appealing.  In formulating its financing policies, the Bank has adopted the motto of “the small man first”.
 
The National Housing Bank’s message is replete with meaning.  Housing the world over has developed on the strength of household savings [like Life Insurance Corporation (LIC) and Provident Fund], which, in India, are part of the general pool shared by other sectors.  While demanding a bigger share out of such savings for the housing sector, the National Housing Bank has indicated certain guidelines for providing financial assistance for land development and shelter projects undertaken by public housing agencies such as the State Housing Boards and the Area Development Authorities.  In Cochin Real Estate developments got accelerated due to the generous funding from the National Housing Bank.
 
The National Housing Policy postulates that the housing agencies and area development agencies in the public sector would be reoriented to work more as promoters and facilitators for housing activities rather than as builders of housing units.  They are expected to play an increasing role in the development and supply of serviced land.
 
The actual construction of houses would be left to the people who can construct their own houses, more economically suited to their family’s social and cultural needs.  However, such reorientation of their role will take time and in the intervening period, the housing development agencies may have to continue with some construction activity especially to help the economically weaker sections and the low-income groups.  Certain amount of construction activity may also be necessary while developing new areas, so as to act as a catalyst for the overall development of new neighborhoods.