National Housing Bank (NHB)

NHB is India’s apex institution for housing finance. It was set up under the National Housing Bank Act, 1987. Its head office is in New Delhi.

What does apex mean here?

• Banks and housing finance companies lend to families. NHB’s site calls them primary lending institutions.
• NHB sits above them and gives them long-term funds.
• Its principal mandate is to promote housing finance institutions.

Who owns it?

The Government of India owns NHB. The ownership changed in 2019. Card 4 explains how.

NHB did not appear overnight. A planning group, a committee and a Budget speech came first.

What are the key steps?

• 1985 to 1990: a Sub-Group for the Seventh Five Year Plan found that households lacked long-term housing finance.
• It suggested a national-level institution.
• The Committee of Secretaries then set up a High Level Group under Dr. C. Rangarajan, then Deputy Governor of the RBI.
• 28 February 1987: the Prime Minister announced NHB in the Budget for 1987-88.
• 23 December 1987: the President gave assent to the National Housing Bank Act.
• 9 July 1988: NHB was set up.

Who paid for it?

The Reserve Bank of India contributed the entire paid-up capital at the start. A Board of Directors runs NHB under the Act.

What is the exam trap?

The Act is from 1987, but NHB began work in 1988. A question may offer both years. Link 1987 with the Act and 1988 with the institution.

NHB mainly funds and promotes lenders. Its site also lists supervision.

What does it offer?

• Refinance: it gives long-term funds against loans that other lenders have made for homes.
• Eligible lenders: housing finance companies, scheduled commercial banks, regional rural banks and urban cooperative banks.
• Support: it also lists project finance, equity support, securitisation and guarantee on its Financing menu.
• Guarantee scheme: it has a scheme to guarantee bonds issued by housing finance companies.
• Training: it runs training programmes for the sector.

What does promotion mean?

The Bank says its mandate is to promote housing finance institutions. It played a facilitator role. It did not open dedicated housing finance institutions itself.

What is the memory hook?

Think “lend to the lenders”. NHB refinances. The banks and companies lend to families.

Two different transfers took place in 2019. They are easy to mix up.

What moved on 9 August 2019?

• After the Union Budget 2019-20 announcements, NHB’s regulatory powers over housing finance companies passed to the RBI.
• The powers included registration of these companies.
• The change took effect on 9 August 2019.

What moved on 19 March 2019?

• The RBI sold its whole stake in NHB, at ₹1,450 crore, on 19 March 2019.
• The Government of India then held 100% of NHB.
• A Finance Ministry notification dated 29 April 2019 recorded the transfer.
• The RBI press release of 24 April 2019 reported the divestment.

Why did the RBI sell?

The RBI said the sale rests on the Narasimham Committee II report. Business Standard reported that the panel said the RBI should not own bodies it regulates.

What happened to the capital?

• NHB’s authorised capital rose from ₹450 crore to ₹1,450 crore, by a notification of 9 December 2015.
• The RBI paid in ₹1,000 crore on 12 January 2016.
• NHB’s site now says the authorised capital is ₹1,450 crore, fully subscribed by the Government of India.

No. It lost one power. It kept its main job.

What did it lose?

It lost its regulatory power over housing finance companies. That power went to the RBI.

What did it keep?

• It still refinances lenders.
• It still promotes housing finance institutions.
• Its site still lists supervision, including on-site inspections.
• Its milestones page says it inspected 73 housing finance companies in 2024-25.

What is the exam trap?

A weak option says NHB stopped all housing finance work after 2019. That is wrong. Another mixes up the two transfers. Regulation went to the RBI. Ownership went to the Government.

No. Both are apex bodies, but they serve different sectors.

How do they compare?

What is the memory hook?

NHB has H for housing in its field. SIDBI has S for small industries. Read the full SIDBI lesson for its story.

NHB’s site gives a few dated snapshots. Treat each one as true on its date only.

What are the snapshots?

• PLR: NHB’s Prime Lending Rate stood at 7.80% from 8 October 2026.
• Refinance: the outstanding refinance portfolio was ₹1,07,913 crore as of June 2025, up 6% on the year.
• Inspections: NHB inspected 73 housing finance companies in 2024-25, using the CAMELS approach.
• Tender: on 7 October 2026 NHB posted a corrigendum to a request for proposals. It seeks a forensic audit of a non-deposit-taking housing finance company based in Udaipur, Rajasthan.

Does the notice name the company?

No. The notice only describes the company. Do not link it to any named firm.

How should you quote the PLR?

Always give its date. NHB posts a new notice when the rate changes. Check the NHB site for the latest figure before you quote it.