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NATIONAL HOUSING BANK ACT

Ministry of Law and Justice

Act nº 53 of 1987


  • Chapter I
  • Chapter II
  • Chapter II
  • Chapter III
  • Chapter V
  • Chapter VA. Other Provisions Relating to Housing Finance Institutions
  • Chapter VI
  • Chapter VII
  • Schedules
  • Amending Acts
  • Act nº 53 of 1987

Preamble

THE NATIONAL HOUSING BANK ACT, 1987

[Act, No. 53 of 1987]

[23rd December, 1987]

PREAMBLE

An Act to establish a bank to be known as the National Housing Bank to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Thirty eighth Year of the Republic of India as follows:--

Chapter I

Section 1. Short title, extent and commencement

(1) Every Statute or Ordinance made under this Act shall be published in the Official Gazette.

(2) Every Statute or Ordinance made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the Statute or Ordinance or both Houses agree that the Statute or Ordinance should not be made, the Statute or Ordinance shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that Statute or Ordinance.

(3) The power to make Statutes or Ordinances shall include the power to give retrospective effect from a date not earlier than the date of commencement of this Act to Statutes or Ordinances or any of them but no retrospective effect shall be given to any Statute or Ordinance so as to prejudicially affect the interests of any person to whom such Statutes or Ordinances may be applicable.

Section 2. Definitions

In this Act, unless the context otherwise requires:--

(a) "Board" means the Board of Directors of the National Housing Bank referred to in section 6;

(b) "Chairman" means the Chairman of the Board appointed under section 6;

(c) "director" means a director appointed under section 6;

(d) "housing finance institution" includes every institution, whether incorporated or not, which primarily transacts or has as1[one of its principal objects], the transacting of the business of providing finance for housing, whether directly or indirectly;

(e) "Managing Director" means the Managing Director appointed under section 6;

(f) "National Housing Bank" means the National Housing Bank established under section 3;

(g) "notification" means a notification published in the Official Gazette;

(h) "Prescribed" means prescribed by regulations made under this Act;

(i) "Reserve Bank" means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934;

(j) words and expressions used herein and not defined but defined in the Reserve Bank of India Act, 1934, shall have the meanings respectively assigned to them in that Act;

(k) words and expressions used herein and not defined either in this Act or in the Reserve Bank of India Act 1934, but defined in the Banking Regulation Act, 1949, shall have the meanings respectively assigned to them in the Banking Regulation Act, 1949.

1. Substituted for "its principal object" by National Housing Bank (Amendment) Act, 2000 (15 of 2000)


Chapter II

Section 3. Establishment and incorporation of National Housing Bank

(1) With effect from such date1as the Central Government may, by notification, appoint, there shall be established for the purposes of this Act, a bank to be known as the National Housing Bank.

(2) the National Housing Bank shall be a body corporate with the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract, and may, by that name, sue and be sued.

(3) The head office of the National Housing Bank shall be at Bombay or at such other place as the Reserve Bank may, by notification, specify.

(4) The National Housing Bank may establish offices, branches or agencies at any place in India, and with the previous approval of the Reserve Bank, at any place outside India.

1. 9-7-88 -- Date on which National Housing Bank established


Section 4. Capital

1 [ Capital

(1) The authorised and paid-up capital of the National Housing Bank shall be three hundred and fifty crores of rupees:

Provided that the Central Government may, in consultation with the Reserve Bank, by notification, increase the authorised capital up to two thousand crores of rupees.

(2) The Board may, on such terms and conditions, as determined by it from time to time, issue the increased authorised capital to the Reserve Bank, the Central Government, scheduled banks, public financial institutions, housing finance institutions or such other institutions, as may be approved by the Central Government:

Provided that no increase in the issued capital shall be made in such manner that the Reserve Bank, the Central Government, public sector banks, public financial institutions or other institutions owned or controlled by the Central Government, hold in aggregate at any time, less than fifty-one per cent, of the issued capital of the National Housing Bank]

1. Substituted by National Housing Bank (Amendment) Act, 2000 (15 of 2000). Prior to substitution it read as under:

The authorised and paid up capital of the National Housing Bank shall be one hundred crores of rupees and shall be subscribed by the Reserve Bank.

Provided that the Central Government may, in consultation with the Reserve Bank, by notification, increase the said capital up to five hundred crores of rupees and the capital so increased shall also be subscribed by the Reserve Bank."


Chapter II

Section 5. Management

(1)The general superintendence, direction and management of the affairs andbusiness of the National Housing Bank shall vest in the Board of Directors,which shall exercise all powers and do all, acts and things, which may beexercised or done by the National Housing Bank.

(2)subject to the provisions of this Act, the Board, in discharging its functions,shall act on business principles with due regard to public interest.

(3)Subject to the provisions of sub-section (1) and save as otherwise provided inthe regulations made under this Act,--

1 [(a) the Chairman, if he is a whole-time director or if heis holding offices both as the Chairman and the Managing Director, or

(b)the Managing Director, if the Chairman is not a whole-time director, or if theChairman being a whole-time director, is absent,]

(4)The Managing Director shall, in the discharge of his powers and functions,follow such directions as the Chairman may give.

(5)In the discharge of its functions under this Act, the National Housing Bankshall be guided by such directions in matters of policy involving publicinterest as the Central Government, in consultation with the Reserve Bank, orthe Reserve Bank, may give in writing.

1 "Clause (a) and(b)" Substituted by National Housing Bank (Amendment) Act, 2000 (15 of2000).

Priorto substitution they read as under:

"(a) the Chairman, if he is holdingoffices both as the Chairman and the Managing Director, or

(b)the Managing Director, if the Chairman is absent, shall also have powers ofgeneral superintendence, direction and management of the affairs and business ofthe National Housing Bank and may also exercise all powers and do all acts andthings which may be exercised or done by the National Housing Bank and shall acton business principles with the due regard to public interest."


Section 6. Board of Directors

(1) The Board of Directors of the National Housing Bank shall consist of the following, namely:--

(a) a Chairman and a Managing Director:

Provided that the same person may be appointed as Chairman and as Managing Director;

(b)1[two directors] from amongst the experts in the field of housing, architecture, Engineering, sociology, finance, law management and corporate planning or in any other field, special knowledge of which is considered useful to the National Housing Bank;

2[(c) two directors, who shall be persons with experience in the working of institutions involved in providing funds for housing or engaged in housing development or have experience in the working of financial institutions or scheduled banks;

(ca) two directors elected in such manner as may be prescribed by shareholders other than the Reserve Bank, the Central Government and other institutions owned or controlled by the Central Government;]

(d) two directors from out of the directors of the Reserve Bank;

(e) three directors from amongst the official of the Central Government;

(f) two directors from amongst the officials of the State Government.

(2) the Chairman, the Managing Director and other directors excluding the3[excluding the directors referred to in clauses (ca) and (d)], shall be appointed by the Central Government in consultation with the Reserve Bank and directors referred to in clause (d) shall be nominated by the Reserve Bank.

1. Substituted for "three directors" by National Housing Bank (Amendment) Act, 2000 (15 of 2000).

2. "Clause (c)" Substituted by National Housing Bank (Amendment) Act, 2000 (15 of 2000).

Prior to substitution they read as under :

"(c) three directors, who shall be persons with experience in the working of institutions involved in providing funds for housing or engaged in housing development;"

3. Substituted for "directors referred to in clause (d)" by National Housing Bank (Amendment) Act, 2000 (15 of 2000).


Section 7. Terms of office of Chairman, Managing Director and other directors, service conditions, etc.

(1) The Chairman and the Managing Director shall hold office for such term, not exceeding five years and shall receive such salary and allowances and be governed by such terms and conditions of service as the Central Government may, in consultation with the Reserve Bank, specify and shall be eligible for re-appointment;

Provided that the Chairman as the case may be, the Managing Director shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office.

(2) The director referred to in1[clauses (b), (c) and (ca)] of sub-section (1) of section 6 shall hold office for a term of three years:

2[***]

(3) The Central Government may, in consultation with the Reserve Bank remove the Chairman or the Managing Director, or any other director referred to in sub-section (2) at any time before the expiry of his terms of office after giving him a reasonable opportunity of showing cause against the proposed removal.

(4) Notwithstanding anything contained in sub-sections (1) and (3) the Central Government, in consultation with the Reserve Bank, shall have the right to terminate the term of office of the Chairman or, as the case may be, the Managing Director, at any time before the expiry of the term specified under sub-section (1) by giving him notice of not less than three months in writing or three months salary and allowances in lieu thereof and the Chairman or the Managing Director, as the case may be, shall also have the right to relinquish his office at any time before the expiry of the term specified under sub-section (1) by giving to the Central Government notice of not less than three months in writing or three months' salary and allowances in lieu thereof.

(5) The directors shall be paid fees and allowances as may be prescribed for attending the meetings of the Board or of any of its committees and for attending to any other work of the National Housing Bank;

Provided that no such fee shall be payable to any director, who is an official of the Government or a director of the Reserve Bank.

1. Substituted for "clauses (b) and (c)" by National Housing Bank (Amendment) Act, 2000 (15 of 2000).

2.The following proviso are omitted by the Banking Companies (Acquisition and Transfer of Undertakings) and Financial Institutions Laws (Amendment) Act, 2006, w.e.f. 16.10.2006.

"Provided that any such director shall, notwithstanding the expiration of his term, continue to hold office until his successor enters upon his office."


Section 8. Disqualifications

No person shall be a director of the Board, if he--

(a) is, or becomes of unsound mind and has been so declared by a competent Court; or

(b) is or has been convicted of any offence which, in the opinion of the Central Government, involves moral turpitude, or

(c) is, or at any time has been, adjudicated as insolvent or has suspended payment of his debts or has compounded with his creditors; or

(d) has, for any reason, been removed or dismissed from the service of--

(i) the Government, or

(ii) the Reserve Bank, the State Bank or any other Bank, or

(iii) any public financial institution, or state financial corporation, or

(iv) any other corporation owned or controlled by the Government.

Section 9. Vacation and resignation of office by directors

(1) If a director--

(a) becomes subject to any of the disqualifications mentioned in Section 8; or

(b) is absent without leave of the Board for three or more consecutive meetings thereof, his seat shall thereupon become vacant.

(2) Any director may resign his office by giving notice thereof in writing to the authority that appointed or, as the case may be, nominated him and on the resignation being accepted by such authority or if his resignation is not sooner accepted, on the expiry of three months from the receipt thereof by such appointing authority, he shall be deemed to have vacated his office.

Section 10. Casual vacancy in the office of Chairman or Managing Director

If the Chairman, or as the case may be, the Managing Director, is by infirmity or otherwise rendered incapable of carrying out his duties or is absent on leave or otherwise, in circumstances not involving the vacation of his appointment, the Central Government may, appoint another person to act in his place during his absence.

Section 11. Meetings of Board

(1) The Board shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings, as may be prescribed.

(2) The Chairman, or, if for any reason he is unable to attend a meeting of the Board, the Managing Director, or in the event of both the Chairman and the Managing Director being unable to attend a meeting, any other director nominated by the Chairman in this behalf and in the absence of such nomination, any director elected by the directors present from among themselves at the meeting, shall preside at the meeting.

(3) all questions which come up before any meeting of the Board shall be decided by a majority of votes of the directors present and voting, and in the event of an equality of votes, the Chairman, or; in his absence, the person presiding, shall have a second or casting vote.