National Housing Bank Annual Report 2010-2011

website : w w w.nhb.org.
in
National Housing Bank
Annual Report 2010-2011
vkj- oh- oekZ

R. V. Verma
v/;{k ,oa izcU/k funs'kd

Chairman & Managing Director
NATIONAL HOUSING BANK
jk"Vh; vkokl cSad
Letter of Transmittal No. NHB (ND)/CMD/12590/2011-12 Date : September 12, 2011 The Secretary, Government of India Ministry of Finance, Department of Economic Affairs, North Bock, New Delhi - 110 001 Dear Sir, In accordance with the provision of sub-section(5) of Section 40 of the National Housing Bank (Amendment) Act 2000, I forward herewith a copy of the Annual Accounts of the National Housing Bank for the year 2010-11. Yours faithfully,
(R.V. Verma) Encls: Annual Accounts in bilingual format
Hkkjrh; fjtoZ cSad ds laiw.kZ LokfeRo esa
dksj 5&, bafM;k gSfcVsV lsaVj] yks/kh jksM+] ubZ fnYyh&110003 nwjHkk"k lh- 011&2464 2722 ihch,Dl 011&2464 9031&35 QSDl % 011&2464 9030 rkj % fuokl cSad bZ&esy % rvverma@nhb.org.in
Wholly owned by Core 5-A, India Habitat Centre, Lodhi Road, New Delhi-110003 Reserve Bank of India Phone : (D) 011-2464 2722 (PBX) 011-2464 9031-35 Fax : 011-2464 9030 Gram : NIWAS Bank email : rvverma@nhb.org.in
^^cSad fgUnh esa i=kpkj dk Lokxr djrk gS**

102
vkj- oh- oekZ

R. V. Verma
v/;{k ,oa izcU/k funs'kd

jk"Vh; vkokl cSad
Letter of Transmittal No. NHB (ND)/CMD/12591/2011-12 Date : September 12, 2011 The Governor, Reserve Bank of India, Central Office, 18th Floor, Shahid Bhagat Singh Road, Mumbai - 400 023 Dear Sir, In accordance with the provision of sub-section(5) of Section 40 of the National Housing Bank (Amendment) Act 2000, I forward herewith a copy of the Annual Accounts of the National Housing Bank for the year 2010-11. Yours faithfully,
(R.V. Verma) Encls: Annual Accounts in bilingual format
Hkkjrh; fjtoZ cSad ds laiw.kZ LokfeRo esa
dksj 5&, bafM;k gSfcVsV lsaVj] yks/kh jksM+] ubZ fnYyh&110003 nwjHkk"k lh- 011&2464 2722 ihch,Dl 011&2464 9031&35 QSDl % 011&2464 9030 rkj % fuokl cSad bZ&esy % rvverma@nhb.org.in
Wholly owned by Core 5-A, India Habitat Centre, Lodhi Road, New Delhi-110003 Reserve Bank of India Phone : (D) 011-2464 2722 (PBX) 011-2464 9031-35 Fax : 011-2464 9030 Gram : NIWAS Bank email : rvverma@nhb.org.in
^^cSad fgUnh esa i=kpkj dk Lokxr djrk gS**

103
Management of National Housing Bank Board of Director (As on September 6, 2011) Under Section 6 of the National Housing Bank Act, 1987
R.V. Verma
Directors Appointed under Section 6 (1) (b) of NHB Act, 1987
Directors Appointed under Section 6 (1) (c) of NHB Act, 1987
Dr. Errol D'Souza
Vidyadhar K. Phatak
R.V. Shastri
Jayshree A. Vyas
Directors Appointed under Section 6 (1) (d) of NHB Act, 1987
H.R. Khan
Lakshmi Chand
Directors Appointed under Section 6 (1) (e) of NHB Act, 1987
Arun Kumar Misra
Alok Nigam Sanjay Kumar Rakesh
Directors Appointed under Section 6 (1) (f) of NHB Act, 1987
G.S. Sandhu
K. Phanindra Reddy
104
okf"kZd fjiksZV 2010&11
ANNUAL REPORT 2010-11
Management of National Housing Bank

Board of Directors (As on September 6, 2011) Under Section 6 of the National Housing Bank Act, 1987
Section 6(1) (a) Section 6(1) (b) Shri R. V. Verma Chairman and Managing Director Dr. Errol D'Souza Professor, Economics Area, Indian Institute of Management, Ahmedabad Shri Vidyadhar K. Phatak Retd. Principal Chief, Town and Country Planning Division, Mumbai Metropolitan Region Development Authority Shri R.V. Shastri Ex-Chair man & Managing Director, Canara Bank Ms. Jayshree A. Vyas Managing Director, Shri Mahila Sewa Sahakari Bank Ltd. Shri H. R. Khan Deputy Governor, Reserve Bank of India Shri Lakshmi Chand, IAS (Retd.) Director - Central Board of Directors, Reserve Bank of India Shri Arun Kumar Misra, IAS Secretary to the Government of India, Ministry of Housing & Urban Poverty Alleviation Shri Alok Nigam, IAS Joint Secretary to the Government of India, Ministry of Finance Shri Sanjay Kumar Rakesh, IAS Joint Secretary to the Government of India, Ministry of Rural Development Shri G. S. Sandhu, IAS Principal Secretary to the Government of Rajasthan, Housing/Urban Development Department Shri K. Phanindra Reddy, IAS Secretary to the Government of Tamil Nadu, Housing / Urban Development Department
105
Executive Committee of Directors

(As on September 6, 2011)
Shri R.V.Verma, Chairman Shri H.R. Khan Shri Lakshmi Chand Shri Alok Nigam Shri Sanjay Kumar Rakesh Shri R.V. Shastri
Audit Committee of the Board

(As on September 6, 2011) Shri Lakshmi Chand, Chairman Shri H.R. Khan Shri Alok Nigam Shri Sanjay Kumar Rakesh Ms. Jayshree A. Vyas Shri Vidyadhar K. Phatak
Section 6(1) (c)
Remuneration Committee
(As on September 6, 2011) Shri H.R. Khan, Chairperson Shri Lakshmi Chand Shri Alok Nigam Shri R. V. Shastri Dr. Errol D'Souza Risk Management Advisory Committee (As on September 6, 2011) Shri R. V. Verma Chairman Shri Arnab Roy Executive Director Shri V. R. Iyer General Manager, Oriental Bank of Commerce Shri K. Raghuraman Chartered Accountant & Retired Banker Dr. Surinder Singh Yadav Head, Department of Management Studies, IIT, Delhi Shri R.S. Garg General Manager Shri V.K. Badami General Manager Shri R.K. Pandey General Manager Shri A. P Saxena . Deputy General Manager
Section 6(1) (d)
Section 6(1) (e)
Section 6(1) (f)
CONTENTS
I. II. Highlights: 2010-11 Global Economy: 2010-11 II.1 Strong Recovery amidst Economic Uncertainties II.2 Financial Market Recovery II.3 Recovery expected to Strengthen Domestic Economy: 2010-11 Union Budget 2011-12 Resource Mobilization V.1 An Overview of the Market Position V.2 Resources mobilised during the year V.3 Sources of Funding Deployment of Funds VI.1 Refinance Performance VI.2 Project Finance Performance Housing Micro Finance Financial Performance: 2010-11 Rural Housing Finance IX.1 Rural Housing Fund IX.2 Golden Jubilee Rural Housing Finance Scheme Equity Participation Regulation and Supervision XI.1 Regulation of Housing Finance Companies (HFCs) XI.2 Supervision of HFCs XI.3 Important Notifications XI.4 Revised KYC Guidelines, Anti Money Laundering Measures, Fair Practices Code & Asset-Liability Management System XI.5 Coordination with Other Regulatory Authorities XI.6 Other Activities Business Planning and Promotion Activities XII.1 Complaint Redressal Mechanism XII.2 Meeting with CEOs of HFCs and Senior Officials of PSBs including select RRBs XII.3 World Habitat Day Celebrations 2010 XII.4 Development and Research Advisory Committee XII.5 Promotional Programme for Energy Efficient New Residential Housing in India XII.6 Risk Management XII.7 Regional Office/Regional Representative Offices Capacity Building Corporate Communications Residential Mortgage Backed Securitization (RMBS) New Initiatives 115 117 117 117 118 118 120 122 122 123 123 124 124 125 126 128 128 128 129 130 131 131 131 132 132 132 133 133 133 134 134 135 135 136 136 137 137 138 138
III. IV. V.
VI.
VII. VIII. IX.
X. XI.
XII.
XIII. XIV. XV. XVI.
XVI.1 File Tracking System XVI.2 Refinance Scheme for Promoting Energy Efficient Housing XVII.Reverse Mortgage Loan XVII.1 Reverse Mortgage Loan (RML) XVII.2 Reverse Mortgage Loan enabled Annuity (RMLeA) XVII.3 Reverse Mortgage Counselling Centres XVIII. Information Technology Initiatives XVIII .1 Portals XVIII.2 IT Projects XVIII.3 Information Security XIX. Development & Promotional Initiatives XIX.1 Asia Pacific Union for Housing Finance (APUHF) XIX.2 Study on Housing Finance Portfolio of Scheduled Commercial Banks Trend Analysis 2005-09 XIX.3 Study on Housing Finance Portfolio of Housing Finance Companies XIX.4 Study on Affordable Housing and Housing Finance in the State of Rajasthan XIX.5 Study on Impact Assessment of Rural Housing Fund XIX.6 Study on the Impact Analysis of Housing Micro-Finance (HMF) Assistance to MFIs XX. Residential Real Estate Price Indices (NHB RESIDEX) XX.1 Background XX.2 NHB RESIDEX: Performance XXI. Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) XXI.1 Background XXI.2 Subsequent Developments XXII. 1per cent Interest Subvention Scheme XXIII. Corporate Governance XXIV. Human Resources XXIV.1 Staff Strength & Recruitment and Promotions XXIV.2 Training XXIV.3 Business Review Conference for officers of the Bank XXIV.4 Mentor Scheme XXV. Rajbhasha XXVI. Knowledge Centre XXVII. Awards and Recognitions XXVII.1 SKOCH Award for Financial Inclusion 2011 for role in Rural Housing XXVII.2 ADFIAP Award for Development Finance-led Poverty Alleviation 2011 for Rural Housing Finance XXVIII. Future Outlook
138 139 139 139 139 140 140 140 141 141 142 142 143 145 145 146 147 147 147 148 151 151 151 151 152 153 153 154 154 154 154 156 156 156 156 157
LIST OF ABBREVIATIONS
ACB ADFIAP : : Audit Committee of Board Association of Development Financing Institutions in Asia and the Pacific Assistant General Manager All India Management Association Asset & Liability Committee Anti Money Laundering Asia Pacific Union for Housing Finance Associated Chambers of Commerce and Industry of India Business Continuity Plan Budget Estimate Business and Industrial Research Division College of Agricultural Banking Compounded Annual Growth Rate Community Based Financial Institutions Central Bank of India Chief Executive Officers Central Registry of Securitization Asset Reconstruction and Security Interest of India Chairman & Managing Director Certificate of Registration Centralized Grievance Redress and Monitoring System
108
CPs CRISIL CRMC CRR CSO DARPG
: : : : : :
Commercial Papers Credit Rating and Information Services of India Ltd. Credit Risk Management Committee Cash Reserve Ratio Central Statistical Organization D e p a r t m e n t o f Administrative Reforms and Public Grievances Disaster Recovery Site Executive Committee Executive Director Economically Weaker Section Foreign Direct Investment Federation of Indian Chambers of Commerce and Industry File Tracking System Gross Domestic Product Golden Jubilee Rural Housing Finance Scheme Golden Jubilee Rural Housing Refinance Scheme Government of Rajasthan Housing Development Finance Corporation Ltd Housing Finance Companies Housing Information Portal Housing Microfinance Head Office Housing and Urban
AGM AIMA ALCO AML APUHF ASSOCHAM
: : : : : :
DR Site EC ED EWS FDI FICCI
: : : : : :
BCP BE BIRD CAB CAGR CBFIs CBI CEOs CERSAI
: : : : : : : : :
FTS GDP GJRHFS GJRHRS GoR HDFC Ltd HFCs HIP HMF HO HUDCO
: : : : : : : : : : :
CMD CoR CPGRAMS
: : :
Development Corporation Ltd HUFs IAS IBA ICAI ICWAI IDA IFC IIM IIP IIT IMF ISDN ISHUP ISP IT KDCMPUL : : : : : : : : : : : : : : : : Hindu Undivided Families Indian Administrative Services Indian Bank's Association Institute of Chartered Accountants of India Institute of Cost and Works Accountants of India International Development Association International Finance Corporation Indian Institute of Management Index of Industrial Production Indian Institute of Technology International Monetary Fund Integrated Services Digital Network Interest Subsidy Scheme for Housing the Urban Poor Information Security Policy Information Technology Kaira District Co-operative Milk Producers' Union Limited Kreditanstalt fr Wiederaufbau, German Development Bank Know Your Customer Liquidity Adjustment
Facility LIG MFIs MHUPA MIG MIK MoU MPLS MRO MTs N-E Region NGO NHB NHB-AWE NIBM NOF NPV PLIs PPP PSBs RAY RBI RC RHF RM RMAC : : : : : : : : : : : : : : : : : : : : : : : : : Low Income Group Micro Finance Institutions Ministry of Housing & Urban Poverty Alleviation Middle Income Group Mongolian Mortgage Corporation M e m o r a n d u m Understanding o f
Multi Protocol Label Switching Mumbai Regional Office Management Trainees North-East Region Non Governmental Organization National Housing Bank NHB-Award Winning Essays National Institute of Bank Management Net Owned Fund Net Present Value Primary Lending Institutions Public Private Partnership Public Sector Banks Rajiv Awas Yojana Reserve Bank of India Remuneration Committee of Directors Rural Housing Fund Regional Manager Risk Management Advisory
KfW
KYC LAF
: :
109
Committee RMBS RML RMLeA RO RRBs RROs SAHF SARFAESIAct : : : : : : : : Residential Mortgage Backed Securitization Reverse Mortgage Loan Reverse Mortgage Loan enabled Annuity Regional Office Regional Rural Banks Regional Representative Offices South Asia Housing Finance Forum Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act State Bank of India Scheduled Commercial Banks Securities and Exchange Board of India
SLBC SLCC UN UNESCAP
: : : :
State Level Bankers' Committee State Level Coordination Committee United Nations United NationsEconomic and Social Commission for Asia and the Pacific Union Territory Video Conferencing Solution Wide Area Network World Economic Outlook World Habitat Day Wholesale Price Index Zero Coupon Bond
UT VCS WAN WEO WHD WPI ZCB
: : : : : : :
SBI SCBs SEBI
: : :
110
LIST OF TABLES
Table I Table II Table III Table IV Table V Table VI Table VII
Refinance Disbursements Refinance Disbursements to Rural Housing Refinance Disbursements for Low & Moderate Size Loan Project Finance Disbursements Golden Jubilee Rural Housing Finance Scheme: Performance during 2009-10 & 2010-11 Golden Jubilee Rural Housing Finance Scheme: Cumulative Performance NHB Residex-Percentage (per cent) change in different cities: City-wise growth rate over the previous quarter Table VIII : NHB Residex: City-wise Housing Price Index (Base Year: 2007 = 100)
: : : : : : :
LIST OF BOX ITEMS Box I Box II Box III Box IV Box V Box VI Box VII : : : : : : : Mortgage Risk Guarantee Fund Trust for Low Income Housing Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) Key Findings of the Study on NHB's Housing Micro Finance Programme (2007-2010) Genesis and Launch of the Asia Pacific Union for Housing Finance Key Highlights of the Trend Analysis of Housing Finance Portfolio of SCBs 2005-09. Growth in Housing Finance Key Findings of the Study on Rural Housing Fund (RHF) Need, Scope and Coverage of NHB RESIDEX LIST OF CHARTS Chart I Chart II Chart III Chart IV Chart V Chart VI : : : : : : GDP Growth and Trend of Domestic Economy 2010-11 Net Incremental Borrowing of NHB during 2010-11 Borrowing Outstanding of NHB as on June 30, 2011 Refinance Disbursements Trend of Refinance Disbursements 1999-2011 NHB Residex: City-wise Housing Price Index
111
Owning a House, Dream of Millions of People
Housing - a basic human need and a dream of millions of people of India. Housing Finance Makes home ownership possible for a vast majority of the people resulting in expansion of the Housing market. Housing Sector - a key contributor to the country's economy on account of its backward and forward linkages. National Housing Bank Striving to develop a sound and sustainable housing finance system in India, with the Bank's Corporate Vision of promoting inclusive expansion with stability in the housing finance market and creation of a supportive market infrastructure through a range of financing and promotional measures.
112
National Housing Bank - Committed to the Cause of Affordable Housing for All
The year 2010-11 marked a milestone for NHB, which crossed `12,000 crore loan disbursements during a financial year. Of this, approximately 50 per cent went towards rural housing. Also approximately 35 per cent of the refinance portfolio was for loans upto `5 lakhs. In its journey of 23 years, the National Housing Bank has led and catalyzed the growth of the housing finance market in the country. The housing finance sector has evolved through various stages, with NHB as the anchor institution. 'Affordable Housing for All' remains the corporate goal of the Bank. Expansion with stability has been the underlying theme of NHB's programs and strategies. Bank, through its multi functional role, is engaged in building the market infrastructure for the sector's efficient functioning. The housing finance system has evolved and steadily grown through various stages, with NHB as the key policy institution at the centrestage. Today, over 50 HFCs have a mortgage loan portfolio of over `1100 billion. The housing industry and a responsive housing credit system can potentially play an important role in stimulating the local and the national economies and in the distribution of economic resources. "Scaling up" and Affordability are key challenges in the Sector and market-based solution will be most sustainable. NHB recognizes the strong synergies in the role of different players and stakeholders in the sector, and seeks to promote effective partnership through market infrastructure initiatives. With the primary housing finance market growing over a period of time, there has been steady expansion of credit flow into the sector. However, there still exists a gap in fulfilling the housing needs of the lower and moderate income households. Housing shortage in the lower income segments is acute. A dedicated and sustainable approach is required to serve this market segment. Through its various promotional and financing initiatives, NHB is pursuing its Vision: 'Promoting inclusive expansion with stability in the housing finance market' and its Mission: 'To harness and promote the market potentials to serve the housing needs of all segments of the population with the focus on low and moderate income housing'.
The Bank has adopted its Vision

Promoting
inclusive expansion with stability in the housing finance
market.
And Mission
To harness and promote the market potentials to serve the housing needs
of all segments of the population with focus on low and moderate

NHB will seek to actualize its Vision through its focus on four broad areas of activities viz. (i) Financing, (ii) Development of Market Infrastructure (iii) Expanding the scope of low and moderate income housing,
113
and (iv) Supervision of housing finance companies and the housing finance system. As envisaged in the NHB Act, the Bank shall act on business principles with due regard to public interest. While the Bank maintains a judicious balance of its various functions, the issue of Affordable Housing for All is a challenge in respect of credit flow and pricing. Issues pertaining to land, legislation, urbanization, finance, risk assessment and mitigation tools etc are some of the key issues in the development and promotion of Affordable Housing market. Role of market infrastructure and new mechanisms that can support the cause of home ownership particularly for the low and moderate income segments, are clearly recognized. Penetration in these market segments is still low and the right business model will include efficient financing, risk mitigation, credit enhancement and specialist approach that can result in more innovative products. Identifying the demand in this market, meeting their credit requirements on acceptable terms, and catalyzing the supply of housing construction at affordable prices are some of the key challenges. Though demands are huge, and the market is potentially large, individual transactions tend to be small and geographically scattered, which can escalate costs. The housing finance sector has enormous developmental impact in terms of social stability and economic empowerment at the individual level and larger economic development at the sector level.
National Housing Bank was set up under an Act of Parliament in 1988, as the apex development housing finance institution. In its journey of more than 23 years, NHB has worked to build up the capacity in the sector to address the housing needs for all segments of the population, with NHB's focus on low and moderate income households. The Bank has been promoting inclusive expansion and stability in housing finance market. The proactive policy support of NHB has expanded the reach and depth of Housing Finance Industry. To supplement its regulatory role, NHB is also expanding its client base to reach all regions of the country and serve all segments of the population. Recent initiatives of NHB, including CERSAI (Central Registry supported by the Government of India) and NHB RESIDEX are steps towards sustainable market infrastructure growth that will add to the transparency and robustness of the market. As its promotional charter, NHB is also supporting the cause of senior citizens through the Reverse Mortgage Loan enabled Annuity (RMLeA) product. NHB is hosting the Secretariat of Asia Pacific Union for Housing Finance (APUHF), a platform for affordable housing in the Asia Pacific region.
114
1. Highlights: 2010-11 I.1 An aggregate amount of `12,034.79 crore has been disbursed by the Bank, of which `11,722.79 crore was disbursed under Refinance Schemes of NHB. An amount of `312 crore was extended through Project Finance operations of the Bank. This is an all-time high disbursements made by the Bank during any financial year. Approximately 35 per cent of total refinance disbursed during the year 2010-2011 comprised of loan size of below `5 lakh. With growing thrust of the Bank on rural housing, the Bank disbursed an amount of `5,785.58 crore under rural housing out of the total refinance disbursements of `11,722.79 crore during the year. The share of rural housing in total refinance disbursements of the Bank has increased from 46 per cent in 2009-10 to 49 per cent in 2010-11. The total borrowings outstanding of the Bank as on 30th June 2011 was `21,776 crore. The main sources of borrowings were Rural Housing Fund, Debenture/Bonds and SUNIDHI & SUVRIDDHI term deposit schemes. Under the Rural Housing Fund, an allocation of ` 2,000 crore was made for the year 2010-11.The Bank received the entire amount which was duly disbursed during the year 2010-11 towards refinance for rural housing for the target groups. Under the Rural Housing Fund, the main beneficiary groups were the women folk which has also contributed towards women empowerment and social upliftment.
Performance Highlights
Year ended 30 th 2008 June Sanctions Disbursements Gross NPAs Net NPAs Profit After Tax (PAT) PAT per Employee CRAR (%)
I.6
I.2
As a measure to address the housing needs of the informal sector, the Bank continued to engage with Microfinance Institutions. The Bank, so far, has sanctioned loans to 29 microfinance institutions in 11 States resulting in construction/repair and renovation of 24,255 housing units located in both urban and rural areas across the country. As on June 30, 2011, the total number of HFCs registered with NHB stood at 52 of which 33 companies have been granted Certificate of Registration (CoR) without permission to accept public deposits. During the year, CoR was granted to 5 new Housing Finance Companies (HFCs) and cancelled in respect of one HFC. Three HFCs have surrendered the CoR on account of their inability to undertake further housing finance business. As an important step to bring in greater commitment to the housing finance business, the Bank has increased the requirement of minimum NOF of HFC from the earlier `2 crore to `10 crore to be eligible to commence or carry on the business of HFI on or after June 18, 2011. The Bank in collaboration with the KfW, Germany has launched a Promotional Programme for Energy Efficient New Residential Housing in India in December 2010. The Programme seeks to promote the concept of energy efficiency in residential houses. . NHB conducted the first ever exclusive training programme for the women personnel working in the housing finance sector on Mortgage Finance for Homes in October 2010 at Bengaluru, which drew appreciation from all stakeholders. More than 30 women personnel representing Banks and HFCs participated in the Programme. NHB continued its role as the Central Nodal agency for implementation of the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) and 1per cent Interest Subsidy Scheme for housing loans of the Central Government. The 1per cent Interest Subsidy Scheme for housing loans, has been extended till March 31st, 2012 and for the
I.7
I.3
I.4
I.8
I.5
I.9
I.10
in `crore
2009 2010 2011
13362 15729 12715 14293 9036 10889 2230 Nil Nil Nil Nil 8160 12035 2485 2770 Nil Nil Nil Nil
Net Owned Funds 1999
I.11
170 2.13 24
236
280
279
2.62 3.15 3.21 18 20 21
115
financial year 2011-12, interest subvention of 1per cent has been extended to include housing loans upto `15 lakh, provided the cost of house does not exceed `25 lakh. I.12 NHB continued its endeavours to promote the Reverse Mortgage Loan Scheme viz. RML and RMLeA - by way of Counseling Programs and Seminars to generate awareness among senior citizens about the scheme. During 2010-11, NHB organized and conducted 16 Seminars and opened three Counseling Centres for senior citizens in various cities of India. Till June 30, 2011, a total of ten Counselling Centres have been established by NHB in nine different cities of the country. NHB RESIDEX the residential property price Index launched by NHB in the year 2007 for tracking prices of residential properties in different parts of the country, is presently being updated on a quarterly basis with its base year as 2007 for 15 cities of the country. During the year 2010-11, the Index was released for the quarters ended June 2010, September 2010, December 2010 and March 2011. The scope of the regional network SAHF (South Asia Housing Finance Union) was expanded to the Asia and Pacific region and the network was renamed as Asia Pacific Union for Housing Finance (APUHF). NHB played a key role, in association with other institutions/countries in the Asia Pacific region, in developing the Union as a platform to act as a knowledge sharing and networking medium and promote coalition and coordination among the Asia Pacific countries to facilitate exchange of ideas and promote cross-learning among the countries . NHB hosts the Secretariat for the APUHF . The first meeting of the Advisory Board of the Union was held in November 2010 and a Workshop on Housing Finance was organised during June 26-29, 2011 at Ulaanbator, Mongolia by APUHF in association with Mongolian Mortgage Corporation (MIK), KfW and Frankfurt School of Finance & Management. The Housing Information Portal (HIP) was launched in the year 2008-09 to serve as a reliable, single point source with updated and complete information on housing and
116
housing finance. The portal was planned to be implemented in three phases with the first phase focussing on individual buyer/seller/renter of property, the second phase on Investors & Business Partners and the third phase on Policy Makers & Professionals. All the three phases have been completed. The contents are now being reviewed/updated periodically as per the review schedule during maintenance phase. The portal can be accessed at www.housingindia.info. I.16 The Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) was launched by the Ministry of Housing and Urban Poverty Alleviation, Government of India for addressing the housing needs of EWS and LIG segments of urban areas. Till June 30, 2011 NHB as a Central Nodal Agency has signed Memorandum of Understanding with 33 primary lending institutions (PLIs) consisting of 20 Public Sector Banks, 2 Private Sector Banks, 5 Regional Rural Banks and 6 Housing Finance Companies and received 190 interest subsidy claims from PLIs claiming ` 5.11 crore as Net Present Value (NPV) of interest subsidy covering 6201 beneficiaries. In the Union Budget announcement for the year 2011-12, the allocation under Rural Housing Fund has been increased from earlier ` 2000 crore in 2010-11 to ` 3000 crore for the year 2011-12. Further, the limit of housing loans for lending under priority sector has also been enhanced from `20 lakh to `25 lakh. The Budget 2011-12 has proposed to create a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana to enable provision of credit to Economically Weaker Sections (EWS) and LIG households. NHB is expected to play a vital role in managing and administering the proposed Fund. The Government had facilitated setting up of Central Electronic Registry under the SARFAESI Act, 2002. This Registry has become operational since March 31, 2011. Recognising the growing importance of Public Private Partnership in the present economic scenario, the Bank has entered into a partnership with International
I.13
I.14
I.17
I.18
I.19
I.15
I.20
Finance Corporation (IFC) and Government of Rajasthan (GoR) to promote low and moderate income housing in the State of Rajasthan through joint participation of the public and the private sectors in promoting an HFC catering to this segment of the market. I.21 Under Golden Jubilee Rural Housing Finance Scheme (GJRHFS), a total of 2,93,721 units were financed by HFCs and PSBs under the Scheme as against a target of 3,75,000 units thus accounting for 78 per cent achievement. Till March 2011, a total of 31,52,967 dwelling units has been financed by the HFCs, Banks and Co-operative sector institutions as against a target of 33,55,000 dwelling units (approximately 94 per cent of the target) during the period from 1997 to 2011. NHB was conferred the SKOCH Financial Inclusion Award 2011 for its intervention in rural housing through the two dedicated Schemes viz. Golden Jubilee Rural Housing Finance Scheme and the Rural Housing Fund, which have demonstrated the viability and sustainability of rural housing finance in the country. The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) conferred on NHB the ADFIAP Award for Development Finance-led Poverty Alleviation for the year 2011. The market mechanism to ensure supply of affordable housing and housing finance as compared to demand is still far from fully developed. The rising population and rapid urbanisation are further putting an immense pressure on the housing stock in the urban areas of the country. Presently, about 30 per cent (328 million) of Indian population are living in urban centres and the estimated number is expected to further rise to about 40 per cent by 2025. This requires a concerted and proactive approach on the part of all the stakeholders. II. II.1 II.1.1 Global Economy: 2010-11 Strong Recovery amidst Economic Uncertainties A fallout of the global economic meltdown w h i ch st a r t e d i n e a r l y 2 0 0 8 w a s transformation in the global economic infrastructure. Remedial actions resulted in II.1.3
strong signs of recovery in the worst affected economies. However, despite strong recovery, the global economy continues to be affected by uncertainties in the financial and the real sectors. The fears of a global recession somewhat receded during the end of the year 2009 and the first half of 2010. Resultantly, there was a spurt in industrial production and trade which continued through the first half of the year 2010 and spurred consumption growth. The sustained growth in economic activities through the year had somewhat neutralized the fears of a double-dip global recession. II.1.2 Such recovery has been marked by geographical disparities. The economic growth has been relatively modest in the advanced economies owing to the severity of the impact of the financial crisis on such economies. On the other hand, the emerging and developing economies have shown visible growth trends and low unemployment rates. However, these economies have witnessed the gradual withdrawal of fiscal stimulus along with monetary tightening to curb inflationary pressures mainly relating to supply-side bottlenecks in respect of food and fuel. Amongst the advanced economies, those in Asia have witnessed a stronger recovery in comparison to their counterparts in the Euro Zone area and North America. With respect to the advanced and developing economies, those in Asia are at the forefront followed by their counterparts in Africa and East Europe. Despite the rebound in growth trends, the global economic conditions continue to remain volatile owing to continued uncertainty about the resolution of the debt crisis in the Euro Zone area. Financial Market Recovery Echoing positive economic sentiments, global financial markets have exhibited encouraging signs of recovery. While credit growth has been somewhat sluggish in the advanced economies, it has exhibited buoyant trends in the emerging and developing economies particularly those in Asia and Latin America. Bank lending has eased in most parts of the world including
I.22
I.23
II.2 II.2.1
117
the developed economies after a prolonged period of tightened lending conditions. II.2.2 Though global capital flows have recovered sharply from the lows they fell into immediately following the crisis, they are way below the levels reached during the pre-crisis period. Prospects of robust growth and higher yields relative to developed economies have attracted capital flows from the developed economies into the emerging markets. On the other hand, capital flow between the developed economies has suffered owing to sluggish economic outlook. The recovery has been mainly spearheaded by portfolio flows with the share of Foreign Direct Investment (FDI) witnessing a falling trend in recent times. In the present scenario, sustained capital flows from advanced economies towards the emerging markets may well continue in the immediate future. This is mainly due to the resilience exhibited by the emerging economies in the face of global uncertainties immediately following the financial crisis. However, geopolitical uncertainties and volatilities with respect to inflationary pressures and the prospect of policy rate hikes to counter such pressures may result in deceleration of capital inflows towards these economies. The year 2010-11 also witnessed resurgence in commodity prices, mainly on account of robust growth in demand for commodities during the second half of the year 2010. Growth in demand for commodities was spurred by rapid growth experienced in the emerging market economies. This led to a spurt in oil prices during the first half of the year 2011. The rise in food prices was mainly related to supply-side shocks caused by weather conditions. These in turn, would adversely affect access to food amidst volatility in food prices. Recovery expected to Strengthen Keeping in mind the improving conditions in global financial markets, buoyant growth experienced in emerging and developing economies and growing confidence in the advanced economies, the economic prospects for 2011-12 look promising. As
per the January World Economic Outlook (WEO) Update released by the IMF, global growth is expected to reach 4.5 per cent during 2011-12. Real GDP is expected to expand by about 2.5 per cent in the advanced economies and by 6.5 per cent in the emerging and developing economies. II.3.2 Industry indicators are pointing towards a growth in industrial productivity. Industrial growth is being propelled by easing financing conditions, robust corporate performance and improving demand. It is expected that developing economies in Asia, Latin America, Eastern Europe and parts of Africa would continue to grow at healthy rates resulting from accommodative monetary policies, rising exports and consumption patterns and sustained capital inflows. However, it is expected that inflationary pressures will continue to remain a major cause of concern during the forthcoming year. Inflationary pressures would mainly result from a spurt in food and energy prices, especially in the developing and emerging economies. Financial markets in advanced economies can expect limited tightening of monetary policies in the forthcoming year. On the other hand, there may be a comparatively higher degree of monetary tightening in the developing economies in order to tame growing inflationary pressures. Domestic Economy: 2010-11 The Indian economy is firmly placed on the path of recovery. As per the Advance Estimates for National Income for 2010-11 (at constant 2004-05 prices) released by the Central Statistical Organization (CSO), the growth in Gross Domestic Product (GDP) at factor cost is estimated at 8.6 per cent during 2010-11, with agriculture and allied activities growing at 5.4 per cent, industry at 8.1 per cent and the services sector at 9.6 per cent. Corresponding growth in GDP during 2009-10 was 8.0 per cent, with agriculture and allied sector, industry and services growing at 0.4, 8.0 and 10.1 per cent respectively. The trend in growth of GDP during the period 1970-71 and 2010-11 has been captured in Chart 1.
II.2.3
II.2.4
III. III.1
II.3 II.3.1
118
Chart I: GDP Growth and Trend of Domestic Economy 2010-11

12.0 10.0 8.0 6.0
Percent
a: Total GDP
4.0 2.0 0.0 -2.0 -4.0

1970-71 1980-81 1990-91 2000-01 1982-83 1992-93 1974-75 1984-85 2002-03 1978-79 1988-89 1994-96 1998-99 2004-05 1971-72 1976-77 1986-87 1996-97
Price Index (WPI) on a year-on-year basis, was recorded at 8.2 per cent in January, 2011 as against 8.5 per cent in January, 2010. The average WPI inflation rate during the twelve month period (February, 2010 to January, 2011) was 9.4 per cent as compared to 2.4 per cent during the corresponding period during 2009-10. III.5 If the WPI inflation of 8.2 per cent recorded during January, 2010 is segregated into food and non-food items, then food inflation stood at 9.30 per cent in January, 2011 as compared to 19.80 per cent in January, 2010. Correspondingly, non-food inflation stood at 7.81 per cent in January, 2011 when compared to 4.65 per cent in January, 2010. The recent spurt in inflation, particularly during the end of year 2010 is mainly attributable to supply-side bottlenecks driven by soaring prices of fruits, vegetables, milk, poultry, fish etc. The inflationary pressures persist mainly due to sustained domestic demand and spurt in commodity prices in the global markets.
2008-09 2010-11
-6.0
GDP growth
GDP growth trend
Source: Macro-Economic & Monetary Developments, RBI, 2010-11
III.2
As per the Index of Industrial Production (IIP), the industrial sector grew at 8.6 per cent during 2010-11 (April December) when compared to the previous year. Out of the three broad industrial sectors, the manufacturing sector which grew at 9.1 per cent during 2010-11 (April December) has been the key driver of industrial growth. Among other industry groups, the capital goods sector recorded an increase in growth during 2010-11 (April December) at 16.7 per cent when compared to the corresponding growth of 11.2 per cent achieved during 2009-10 (April December). As far as the consumer durables and non-durables sectors are concerned, the growth rates have declined to 21.7 per cent and 0.7 per cent during 201011 as compared to 22.7 per cent and 1.4 per cent respectively during 2009-10 (April December), thereby indicating a year over year decline. With respect to the infrastructure sector, the index for six core industries (crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel, which have a combined weight of 26.68 per cent in the IIP) grew at 5.6 per cent during 2010-11 (April January) as compared to a growth rate of 5.5 per cent achieved during the corresponding period of 2009-10. A major cause of concern during the year was a spurt in inflationary pressures mainly resulting from supply-side bottlenecks. Inflation, as measured by the Wholesale
2006-07
III.3
III.4
III.6 The Government had adopted an accommodative monetary policy since September 2008 with the intention of mitigating the adverse effects of the global financial crisis on the Indian economy. However, it was forced to make an exit from the same for countering accentuated inflationary pressures that were threatening the economy. The Reserve Bank of India had to perform the difficult task of ensuring sufficient liquidity for smooth functioning of the markets on the one hand while continuing with its antiinflationary monetary policy stance on the other. The RBI had increased the Cash Reserve Ratio (CRR) by 100 basis points, Reverse Repo Ratio by 250 basis points and the Repo Rate by 200 basis points since February, 2010. With the tightening of liquidity conditions, the RBI started injecting liquidity through repo under the LAF beginning end May, 2010. III.7 Credit growth, though somewhat moderated, remained above the projected levels. In response to higher interest rates
119
resulting from frequent policy rate hikes by RBI during the year, non-food credit growth decelerated and deposit growth accelerated. Net capital flows at US$ 36.7 billion during April-September, 2010 were higher when compared with US$ 23.0 billion during April-September, 2009. III.8 However, net FDI into India moderated to US$ 5.3 billion during April-September 2010 as against the US$ 12.3 billion received during April-September 2009. However, portfolio investment witnessed an increase during the first half of the year 2010-11 with net inflows to the tune of US$ 23.8 billion as against US$ 17.9 billion received during the same period of the year 2009-10. The surge in portfolio flows could be attributed to sound economic fundamentals and rising international liquidity. During 2010-11, India's foreign exchange reserves continued to exhibit an increasing trend. The country's foreign exchange reserves increased to US$ 299.2 billion at end January 2011 from the level of US$ 279.1 billion at end March, 2010.
Interest Subvention on Housing Loans upto `10 lakh where cost of housing unit do not exceed `20 lakh has been further extended for the FY 2011-12. The amount of loan eligible under the Scheme has also been increased upto `15 lakh (from the earlier `10 lakh) for housing unit whose cost does not exceed `25 lakh (from the earlier `20 lakh). The proposal is expected to improve affordability levels and generate increased demand for housing loans particularly from LIG and MIG segments. The proposal will encourage the State and/or Private sector agencies to undertake construction of houses/flats within the cost range of upto `25 lakh, which will cater to the needs of a vast segment of the population. IV.2 Enhancement of Housing Loan Limit under Priority Sector Lending: The existing housing loan limit under Priority Sector Lending by banks has been enhanced from `20 lakh to `25 lakh. This proposal will encourage lending by Banks to the Housing Sector to meet their overall target of 40per cent lending to priority sector. As a result, banks lending in this segment will witness significant increase in the coming years due to increased demand for housing loans in this segment. IV.3 Provision under Rural Housing Fund Enhanced: The provision under Rural Housing Fund has been increased to `3000 crore from the existing `2000 crore. This proposal will encourage the provision of Housing Finance to target groups in rural areas, a step towards mitigating the housing shortage in rural areas. IV.4 Proposal to Create Mortgage Risk Guarantee Fund under Rajiv Awas Yojana: The Budget 2011-12 has proposed to create a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana to enable provision of credit to Economically Weaker Sections (EWS) and LIG households. This proposal will encourage lending by banks and housing finance institutions to EWS and LIG households as the proposed Guarantee Fund will enhance the credit worthiness of EWS/LIG segments by providing guarantee cover to the
III.9
III.10 As far as social sector development is concerned, the share of Central Government expenditure on social services including rural development in total expenditure (Plan and non- Plan) has increased from 13.75 per cent in 2005-06 to 19.27 per cent in 2010-11 (BE). Similarly, the expenditure on social services by the Government (Centre and States combined) has also shown increase in recent years reflecting higher priority to social services. The expenditure on social services as a proportion of total expenditure has increased from 21.1 per cent in 2005-06 to 23.8 per cent in 2008-09 and further to 25.2 per cent in 2010-11 (BE). IV. Union Budget 2011-12 The Hon'ble Finance Minister in his Union Budget for the year 2011-12 had announced the following measures with respect to the housing and housing finance sector. IV.1 Scheme of Interest Subvention of 1 per cent on Housing Loans Liberalised Further: The existing Scheme of 1per cent
120
housing loans taken by these people . The proposal will result in strengthening the housing finance market for the lower segment households and would result significantly in mitigating their housing problems with increased credit flow and its availability. The lending institutions will cover their risk of default and enjoy capital relief on the loans covered by the Risk Guarantee Fund. Box I Mortgage Risk Guarantee Fund Trust for Low Income Housing The Hon'ble Union Finance Minister in his Budget speech for the FY 2011-12 has proposed to create a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana (RAY) to enable provision of housing loans to Economically Weaker Sections (EWS) and LIG households. The major objective of this Trust will be to provide default guarantee for housing loans upto ` 5 lakh sanctioned and disbursed by the lending institutions without any collateral security and/or third party guarantees to the new or existing borrowers in the EWS/LIG categories. The Government of India, Ministry of Housing & Urban Poverty Alleviation (MoHUPA) will set up the Trust under the Mortgage Risk Guarantee Scheme. National Housing Bank is expected to manage and administer the proposed Fund Trust including providing the infrastructure support & the required staff. IV.5 Setting up of Central Electronic Registry: The Government had facilitated setting up of Central Electronic Registry under the SARFAESI Act, 2002. This Registry has become operational since March 31, 2011. Such a Registry will help in creation of a centralized data base of all immovable properties and will enable prevention of frauds in housing loan cases involving multiple lending from banks/HFIs on the same immovable property. This will constitute as an important step in developing the market infrastructure. IV.6
Box II Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) The Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI), a Government Company licensed under Section 25 of the Companies Act, 1956 has been incorporated for the purpose of operating and maintaining the Central Registry under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The objective of setting up the Central Registry is to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property. This Registry has become operational on March 31, 2011. All transactions involving creation of equitable mortgage by deposit of title deeds, asset reconstruction and creation of security interest made on or after March 31, 2011 needs to be registered with CERSAI. Information furnished to CERSAI include particulars of the property, nature of encumbrance, institution with which property is mortgaged etc. Each registration made is assigned with one unique asset identification number. Total number of institutions registered with CERSAI as on 30th June 2011 is 151 and the number of users created is 31388. Total number of registration of mortgage by deposit of title deeds done by Banks/ HFCs and other financial institutions as on 30th June 2011 is 100021. Enhancement in the Export Duty for Iron Ore, Reduction in the Customs Duty on Raw Materials of Cement Industry: The rate of export duty for all types of iron ore has been enhanced and unified at 20per cent ad valorem. Similarly, the basic customs duty on two critical raw materials of Cement industry viz. petcoke and gypsum is also proposed to be reduced to 2.5 per cent. As iron ore is natural resource, enhancement in the export duty will discourage its export and help in conservation of it. Iron and Steel is one
121
of the essential raw materials used in the construction of Housing. The proposal will result in reduction in prices of iron and steel as also improvement in its supply in the domestic market. Similarly, the proposed reduction in customs duty on two critical raw materials of Cement industry viz. petcoke and gypsum will encourage increased supply of Cement in domestic market at more competitive rates. The overall impact of enhancement in export duty on iron ore and reduction in custom duty on petcoke and gypsum will be reduction in the cost of construction of housing. IV.7 Proposal to Provide Investment Linked Deduction to Businesses Which Develop Affordable Housing under A Notified Scheme This proposal will encourage private players to venture into developing low cost housing and thus help in increasing supply of low cost housing units. IV.8 Enhancement of the Exemption Limit for the General Category of Individual Taxpayers: The exemption limit for the general category of individual taxpayers has been increased from `1,60,000 to `1,80,000 from FY 2011-12. This measure will result in a uniform tax relief of `2,000 to every taxpayer. This proposal will increase the loan repaying capacity of the individual home loan borrowers which may result in the increase in demand for housing loan. IV.9 Continuation of Income Tax Benefits under Sections 24, 88 And 36(1)(viii) of the Income Tax Act: The Budget 2011-12 has retained the benefits of tax exemptions under aforesaid Sections of the I. T. Act, viz. repayment of principal amount of loan upto `1 lakh, interest upto ` 1.50 lakh and creation of Special Reserve under Section 36(1)(viii). Retention of the aforesaid incentives will continue to generate new demand for housing loans as also supply of credit, with downward bias in rates.
IV.10 Issue of Tax Free Bonds by Housing and Urban Development Corporation (HUDCO): Housing and Urban Development Corporation (HUDCO) has been allowed to issue tax free bonds of ` 5000 crore for the development of housing sector. This will provide boost to infrastructure development in housing. Financial Performance of the Bank during 2010-11 V. V.1 Resource Mobilization An Overview of the Market Position
V.1.1 During the year 2010-11, growth momentum remained strong in all the three major sectors of the economy viz. industrial, agriculture and service sector, despite the volatilities. However, persistence of high food inflation remained a cause of concern. In addition, international crude oil prices also recovered sharply on the back of strong global recovery further fuelling the inflation. V.1.2 The Reserve Bank of India (RBI) shifted its monetary policy stance from managing recovery to managing inflation during the course of the year as inflation emerged as a major concern for the Indian economy. RBI, in its effort to contain inflation, hiked repo rate 8 times during the year from 5.25per cent to 7.50per cent. Similarly, reverse-repo has also been increased from 3.75per cent to 6.50per cent during the same period. Further regulated savings bank deposit interest rate was also increased from 3.50per cent to 4per cent. V.1.3 Liquidity in the system has remained tight throughout the year with banks regularly borrowing under LAF window from RBI. All these developments have made credit significantly costly as compared to previous year. Further transition to Base Rate regime by the banks on the instruction of RBI has also impacted the cost of short term credit as banks are not permitted to lend below base rate. V.1.4 Going forward, inflation path remains sticky and risks are on the upside. Headline
122
inflation could remain elevated in the first half of 2011-12 before declining gradually in the second half, but could remain above the Reserve Bank's comfort level. Pass-through of global commodity prices, especially oil, has been as yet incomplete and constitutes a significant medium-term risk. V.2 Resources mobilised during the year V.2.1 NHB raised both short term and long term resources during the year. Short term resources included issuance of Commercial Papers (CPs) and Short Term Loans from banks. Long Term borrowings included issuance of Zero-coupon Bonds (ZCB), Coupon Bonds, Term Loans from banks, Deposits from banks under Rural Housing Fund (RHF), Deposits from Housing Finance Companies (HFCs) and Deposits from public under SUNIDHI and SUVRIDDHI term deposit schemes. The gross incremental borrowing during the year was `35,503 crore. After repayments during the year, the net incremental borrowing during 2010-11 was `10,182 crore. Chart II: Net Incremental Borrowing of NHB during 2010-11
Net incremental Borrowing during 2010-11
4000 3500 3000 2500 2000 1500 1000 500 0
BONDS & DEBENTURES LOAN AGAINST RURAL HOUSING FUND DEPOSIT (LAD) SUNIDHI / SUVRIDDHI TERM LOANS
Chart III: Borrowing Outstanding of NHB as on June 30, 2011

CBLO 2% LOAN AGAINST DEPOSIT1 % TERM LOANS 23% BONDS & DEBENTURES 45% EXTERNAL BORROWING 2%
RURAL HOUSING FUND26%
DEPOSITSPUBLIC / HFCs1%
payment of financial obligation on the instruments. The total borrowing outstanding as on 30th June 2011 is` 21,776 crore. V.3 Sources of Funding V.3.1 Rural Housing Fund (RHF) : While presenting the Union Budget for the year 2008-09, the Hon'ble Finance Minister, announced creation of a fund to enhance NHB's refinance operations in the rural housing sector by tapping the resources of Scheduled Commercial Banks to the extent of shortfall in their priority sector lending. The allocation for the year 2008-09 was `2000 crore. In the year 2009-10 and 2010-11 a further sum of `2000 crore each was allocated by the banks to the Fund. V.3.2 Bonds and Debentures: Bonds and Debentures have been one of the main components of resource raising during the year 2010-11. Bonds and Debentures for a face value of `4025 crore were issued during the year including a Zero Coupon Bond for face value of `800 crore. The actual cash inflow on account of such issuance was `3867 crore. While the Coupon / discount on these Bonds and Debentures ranged between 7.00per cent and 9.75per cent, the tenors ranged between 12 months and 60 months. V.3.3 SUNIDHI & SUVRIDDHI term deposit schemes: NHB launched two new term deposit schemes viz. SUNIDHI & SUVRIDDHI during the year 2008-09. SUNIDHI term deposit is open for individuals/ HUFs/ Partnerships/ Societies & Trusts / Association of Persons. Minimum tenor is one year and the maximum is five years. SUVRIDDHI is
123
( Rs. Crore)
3867
3972
2015 280 48
V.2.2 Bonds issued by NHB are rated AAA by at least two of the rating agencies approved by SEBI viz. CARE ratings, CRISIL, Fitch ratings and Brickwork ratings and are listed on Bombay Stock Exchange / National Stock Exchange. Commercial Papers issued by NHB during the year were rated A1+ by ICRA. These ratings indicate highest degree of certainty regarding timely
VI.
term deposit scheme open only for individuals and HUFs and the tenor is five years. SUVRIDDHI is notified under Section 80C of Income Tax Act, 1961. Amount outstanding as on 30.06.2011 under both the schemes is `223 crore out of which `48 crore was mobilised during the year. Deployment of Funds
NHB extends Financial assistance through refinance as also the project finance windows. The refinance assistance provided to various Primary Lending Institutions viz. Banks, Housing Finance Companies, Co-operative sector institutions is towards their individual housing loans. The project finance intervention of the Bank is through the direct finance window to Public and Development agencies/ Municipal Corporations/Welfare Association / Micro Finance Institutions etc Table I: Refinance Disbursements Institution Category
HFCs Scheduled Banks incl. RRBs Total
for the housing projects. VI.1 Refinance Performance VI.1.1 During the year 2010-11, refinance disbursements touched the highest ever figure of `11,722.79 crore, registering an increase of more than 44per cent over the disbursements of `8,107.76 crore made in the year 2009-10. Out of the total disbursements, ` 5,785.58 crore were disbursed for rural housing under NHB's two rural housing refinance schemes viz. the Golden Jubilee Rural Housing Refinance Scheme (GJRHRS) and the Rural Housing Fund (RHF), together constituting 49.35per cent of the total disbursements. VI.1.2 The break-up of the disbursements made to different categories of institutions under different schemes during 2010-11 is as under:
( ` Crore)
Regular Scheme
1139.21 4798.00 5937.21
RHF
1687.54 316.12 2003.66
GJRHRS
481.92 3300.00 3781.92
Total
3308.67 8414.12 11722.79
The graphical representation of during 2010-11 is as under:

15000 10000 5000 0 Regular RHF
disbursements
( ` Crore)
Chart IV: Refinance Disbursements
Year 1999-00 2000-01 2001-02 2002-03 2003-04
Disb. 842 1008 1025 2710 3253 8062 5632 5500 8587 10854 8108 11723
GJRHRS
Total
2004-05
Total
HFCs
Scheduled Banks incl. RRBs
2005-06 2006-07 2007-08 2008-09 2009-10
Trend of refinance disbursed since 1999-2011 is as under:
Chart V: Trend of Refinance Disbursements 1999-2011

Disbursements
Trend of Refinance Disbursements

15000 10000 5000 0
19
99
-0
0 20
00
-0
1 20
01
-0
2 20
02
-0
3 20
03
-0
4 20
04
-0
5 20
05
-0
6 20
06
-0
7 20
07
-0
8 20
07
-0
8 20
09
-1
0 20
10
-1
2010-11
124
VI.1.3 Performance under Rural Housing Out of the total refinance disbursements of `11,722.79 crore, 49.35per cent aggregating `5,785.58 crore were disbursed under the Rural Housing Fund (RHF) and the Golden Jubilee Rural Housing Refinance Scheme (GJRHRS) together in respect of loans given by Primary Lending Institutions (PLIs) in the rural areas. The break-up of the disbursements made for rural housing is as under: Table II. Refinance Disbursements to Rural Housing Institution Category Housing Finance Companies Scheduled Banks incl. RRBs. Total Amount ( ` Crore) 2169.46 3616.12 5785.58
to be included, about 84per cent of the refinance disbursements in 2010-11 were made in respect of housing loans upto `15 lakh. VI.2 Project Finance Performance VI.2.1 During the year 2010-11, the Bank has sanctioned Project Finance assistance for 6 projects amounting to ` 78.80 crore and disbursed ` 312.00 crore including unutilized sanctions of previous years. This disbursement was one of the highest in Project Finance of the Bank. The disbursements were made to Housing Micro Finance Institutions, Public Agencies and Joint Ventures under Public Private Partnership. Category wise break up of disbursement is as under: ( ` Crore) Table IV: Project Finance Disbursements Disbursements Budget Achieved
Public Housing Agencies Slum Redevelopment Projects / EWS / LIG / Housing Micro Finance PPP and others Total 500 75 100 675 216 6 90 312
Housing Finance Companies Scheduled Banks incl. RRBs
VI.1.4 Focus on Low & moderate Size Loans The disbursement of refinance during the year 2010-11 focused on Low and moderate size loans The distribution of refinance disbursements on the basis of individual loan size is as under :
Table III: Refinance Disbursements for Low & Moderate Size Loan Size of Individual Amount Percent Loans against which (`crore) of Total Refinance Disbursed
Upto `2 lakh `2 lakh to `5 lakh `5 lakh to `15 lakh Over `15 lakh Total 290.35 3816.53 5740.29 1875.62 11722.79 2.48 32.56 48.96 16.00 100.00
A project of Andhra Pradesh Rajiv Swagruha Corporation Limited financed by NHB
VI.2.2 Cumulatively, till end of the June 2011, the Bank has sanctioned 434 projects having project cost of `5997.45 crore and loan component of `4528.36 crore. So far the Bank has disbursed `2042.67 crore under Project Finance.
Thus, more than 35per cent of the refinance disbursements in 2010-11 were made in respect of housing loans upto `5 lakh. Moreover, if loans upto `15 lakh were also
Housing complex under construction -Public Private Partnership
125
VI.2.3 UN-HABITAT Water & Sanitation Programme: NHB had signed an agreement of cooperation with
Rajasthan through joint participation of the public and the private sectors. The event m a rk e d t he co m i ng together of the
National workshop on water and sanitation at Nagpur
UN-Habitat for collaborating on water supply and sanitation projects for low income households in the year 2008-09. Under the agreement, UN Habitat has agreed to provide $3,75,000 through NHB for the water and sanitation component of housing micro finance projects, for standalone water and sanitation projects and for capacity building and training efforts in this field. VI.2.4 During the year 2010-11, an amount of $1,27,500 has been received by the Bank in the second instalment and in turn NHB has disbursed `25.00 lakh to Nanayasurabhi Development Financial Services for construction of estimated 312 toilets for the members of SHGs operating in 3 districts of Tamil Nadu and `1.50 crore for construction of estimated 5000 toilets for individual members of the registered Primary Milk Producers' Co-operative Societies affiliated to Kaira District Cooperative Milk Producers' Union Limited (KDCMPUL), Gujarat. Additional funds for the above disbursements were provided by NHB from its Special Fund. One national level workshop on water and sanitation has been organized in Nagpur, under the Programme. VI.2.5 MOU with IFC and State Government of Rajasthan: NHB, International Finance Corporation (IFC) and Government of Rajasthan (GoR) have entered into a partnership and signed a Memorandum of Understanding (MoU) to promote low and moderate income housing in the State of
126
Signing of Memorandum of Understanding between National Housing Bank, International Finance Corporation and Govt. of Rajasthan in the presence of Minister of State for Finance, Sh Namo Narain Meena
Stakeholders, viz. NHB, IFC and GoR to sign the MoU in New Delhi on October 27, 2010. VI.2.6 Consistent with the charter of the NHB and in line with the IFC's growing interest in the Indian market, the Partnership will lead to the creation of a State-specific specialised Housing Finance Institution to cater to the underserved market. The Partnership is also expected to spur the demand for low and moderate housing through credit support from the lending institutions. The growing demand will spur housing supply through a conducive and supportive State housing Policy. This has the potential of turning into a unique model to address the housing shortage among the low income households. VII VII.1 Housing Micro Finance (HMF) NHB has been at the forefront of Housing Microfinance (HMF) initiatives by giving financial assistance to MFIs in various parts of the country. The Bank has recognised Community Based Financial Institutions (CBFIs) as delivery mechanisms for channelizing housing finance to the unserved and the underserved at the local and decentralized level. Accordingly, NHB has developed a Housing Microfinance Programme to cater to the needs of this section of society.
VII.2
Under the Housing Micro Finance, the Bank's focus is to develop sustainable human habitats which are eco-friendly, cost effective and productive. Work sheds form an integral part of all housing projects with necessary water and sanitation facilities. Incremental housing (repair/renovation) assumes significance in the context of affordability and sustainability of the programme. Housing microfinance (HMF) programme of Bank, during the last few years of operation, has displayed encouraging results. The Bank's Housing Micro Finance (HMF) programme started in 2004, and the Bank has sanctioned loans to 29 microfinance institutions in 11 States in the country. During the year 2010-11, funds were disbursed to 6 new MFIs and extended to 3 new States viz. Gujarat, Uttar Pradesh and West Bengal. The program has resulted into construction/repair and renovation of 24,255 housing units located in both urban and rural areas of the country. The beneficiaries include farmers, petty traders, artisans, dairy workers and other low income households. More than 90per cent of the beneficiaries were women.
Study has covered both qualitative and quantitative aspects of the lending Programme. Apart from studying the impact of the HMF Program, the study will also help in deriving essential policy inputs that could contribute to the scheme's overall effectiveness and identification of factors which can expand the scope and potential of HMF assistance provided by NHB. The Study focussed on analysing the fulfilment of HMFs objective, its geographic expansion and coverage, assessment of the role played by NHB and client MFI's, assessment of borrower's profile relating to various economic and demographic indicators such as age, gender, income, etc. The purpose of the Study was to suggest various factors/parameters for enhancing /widening the scope and operations of NHBs HMF Programme. Box III Key Findings of the Study on NHB's Housing Micro Finance Programme (2007-2010)
? HMF is in a nascent stage in the Indian
VII.3
micro-finance sector. There are very few examples to demonstrate its scalability and impact on the target sections.
? sanctions data is showing constant The
addition of new clients and disbursements over the period showing diversification from the southern states of Tamil Nadu and Andhra Pradesh.
? Average amount of loan is showing
decreasing trend over the period of study primarily due to the fact that majority of loans are taken for the purpose of repairs and renovation and not for new construction.
? Majority of borrowers belong to the 30-40
VII.4
Study on Housing Micro Finance (HMF) Assistance provided by NHB: The Bank had conducted a study on the Impact Analysis on the HMF assistance provided by NHB to evaluate and assess the impact of NHB's assistance provided to MFIs. The
years age bracket and are employed in agriculture sector or depend on agriculture for livelihood.
? Majority of borrowers have monthly
household income ranging from `5000 to `10,000.
127
? Majority of the beneficiaries are charged the
rate of interest between 12per cent to 15per cent.

? Women borrowers are major beneficiaries
forming 80per cent of total borrowers under the programme.

? Micro Finance Institutions (MFIs) provide
an innovative channel to finance housing for the poor. However, the ability for microfinance institutions to provide housing continues to be difficult, mired in concerns over scarce funding, legal risks arising from informal land title, lack of collateral and insufficient knowledge about construction
?conclude, Housing Microfinance (HMF) To
enable Primary Lending Institutions (PLIs) to access funds for extending housing finance to targeted groups in rural areas at competitive rates. The corpus of the fund since the year 2008-09 has remained at `2000 crore for each year. A total amount of `5778.18 crore has been received by the Bank under the Fund, and the Bank has deployed the full amount towards refinance for rural housing for the target groups. Most of the lending under the Rural Housing Fund has been for housing loans of less than `5 lakh, which shows that the Fund has been utilized for its intended purposes. IX.1.2 With the advent of the Rural Housing Fund at competitive rates, many institutions viz. Housing Finance Companies, Regional Rural Banks (RRBs) etc. have entered into the rural housing landscape, thereby resulting in better geographical distribution and increased penetration of housing loans among the underprivileged segments of the society. Further, the success of RHF has also introduced a fair amount of understanding of the characteristics and contours of the rural housing finance market, enabling the various players to design better and more targeted products for the rural populace. IX.1.3 The Housing Finance Companies have, in all, disbursed `1687.54 crore under the Rural Housing Fund, which has helped in creation of dwelling units for women, marginal farmers, small artisans, members of scheduled castes and scheduled tribes and minority communities. Similarly, the RRBs have now taken up housing finance as a major focus area. The Bank has, during 2010-11, added 6 new Regional Rural Banks as its refinance clients. Through RRBs, an amount of `134.12 crore was disbursed under the Rural Housing Fund. Efforts are being made to encourage more RRBs across the country to take up rural
programme of Bank during the last four years of operation, has displayed encouraging results. However steps need to be taken to expand its outreach and ensure its holistic development. For a holistic development of programme, there is a need for concerted efforts on the part of all the stakeholders towards capacitybuilding measures and establishing linkages with institutions that have a strong presence in the rural sector. VIII. Financial Performance: 2010-11 During the year 2010-11, Profit before tax was `399.20 crore as against `422.10 crore during the previous year, registering a decline of 5.43 per cent. Similarly, the Profit after tax, which stood at `278.93 crore as against `280.24 crore during the previous year, shown a decline of 0.47 per cent. As a result of plough back of Profit to Reserves, the Net Owned Fund of the Bank increased from `2,485.32 crore to `2,770.23 crore during the year. General Activities IX IX.1 Rural Housing Finance Rural Housing Fund
IX.1.1 The Hon'ble Finance Minister, in his Union Budget speech for 2008-09, announced the setting up of the Rural Housing Fund to
128
housing finance in a major way and to avail refinance from NHB for this purpose, which will go a long way in promoting housing finance in rural areas throughout the country. IX.1.4 To promote housing finance in the deep and remote rural areas, a few Public Sector Banks, which had met the priority sector targets for the year 2009-10 and had therefore not contributed to the allocation under Rural Housing Fund for 2010-11, availed refinance assistance in respect of their lending to weaker sections for housing in rural areas having population of upto 5,000 as per the 1991 Census. An amount of ` 182 crore has been provided to Public Sector Banks under this Scheme in 2010-11. IX.2 Golden Jubilee Rural Housing Finance Scheme
Scheme aims to provide the rural households a formal platform for sophisticated access to housing finance to enable an individual to either build a modest house or improve/add to his existing dwelling unit. IX.2.2 The success of the Scheme can be attributed to the fact that over 31 lakh dwelling units have been financed under the Scheme since its inception through various PLIs viz. Housing Finance Companies (HFCs), Public Sector Banks (PSBs) and Cooperative Sector Institutions. The allocation of targets to various PLIs under the Scheme as well as its monitoring is done by the National Housing Bank. IX.2.3 Performance during 2010-11: During the year 2010-11, a total of 2,93,721 units were financed by HFCs and PSBs under the Scheme as against a target of 3,75,000 units thus accounting for 78 per cent achievement. The consolidated performance of HFCs and PSBs under the Scheme during the last two years can be outlined as below:
IX.2.1 The Golden Jubilee Rural Housing Finance Scheme (GJRHFS) was launched on the occasion of the Golden Jubilee of the nation's Independence in 1997. The
Table V: Golden Jubilee Rural Housing Finance Scheme: Performance during 2009-10 & 2010-11
(Number of dwelling units) Table V: Golden Jubilee Rural Housing Finance Scheme: Performance during 2009-10 & 2010-11 Institution 2009-10 HFCs PSBs Total 87,500 2,62,500 3,50,000 Target 2010-11 93,750 2,81,250 3,75,000 2009-10 78,207 3,09,585 3,87,792 Achievement 2010-11 1,20,111 1,73,610 2,93,721 Percentage Achievement 2009-10 89 118 111 2010-11 128 62 78
129
IX.2.4 Cumulative Performance under the Scheme: In terms of achievement, the performance of the Scheme since its inception has been laudable, as can be concluded by the fact that a total of 31,52,967 dwelling units have been
financed by the HFCs and PSBs as against a target of 33,55,000 dwelling units (approximately 94 per cent of the target) during the period from 1997 to 2011. The progress of the Scheme since the inception is as follows:
Table VI: Golden Jubilee Rural Housing Finance Scheme: Cumulative Performance Year Target Achievement Amount disbursed ( ` in crore) --------3246.03 3816.34 6353.82 6440.95 8367.86 7664.58 8844.81 10337.88 15,565.24 14,814.91
1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 Total
50,000 1,00,000 1,25,000 1,50,000 1,75,000 2,25,000 2,50,000 2,50,000 2,75,000 3,30,000 3,50,000 3,50,000 3,50,000 3,75,000 33,55,000 X X.1
51,272 1,25,731 1,41,363 1,58,426 1,87,268 1,78,200 2,43,753 2,58,562 2,98,651 2,98,426 2,71, 537 2,58,265 3,87,792 2,93,721 31,52,967 Equity Participation
IX.2.5 The performances of HFCs and PSBs under the Scheme have continuously been improving over the last few years. However, the performance of PSBs during the current year was slightly unimpressive and keeping in view that the PSBs have been able to achieve only 62 per cent of their target during the current year as compared to 118 per cent during the last year, the target for the year 2011-12 has been kept fixed at 3,75,000 dwelling units. For further improved performance of the HFCs and PSBs, the Scheme is being closely monitored by NHB.
As part of its developmental role, NHB has equity participation in two Housing Finance Companies viz Cent Bank Home Finance Limited (Sponsored by the Central Bank of India) and Mahindra Rural Housing Finance Limited (a company formed for extending housing finance exclusively in rural and semi-urban areas). The realizable value of equity holding in these two HFCs as on 30-06-2011 stood at ` 11.97 crore. During the year 2010-11, the Bank has also agreed to subscribe to the equity of a new
X.2
130
Housing Finance Company being formed in the State of Rajasthan to cater to the housing finance needs of the low and middle income segments in the State. The proposed new company is to be formed in collaboration with the Government of Rajasthan, the International Finance Corporation and Private Sector Institutions. X.3 The Bank has also, during 2010-11, subscribed to the equity share capital of Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). The Company is a Government Company with a shareholding of 51per cent by the Central Government. Select Public Sector Banks and the National Housing Bank are the other shareholders of the Company. Regulation and Supervision Regulation of Housing Finance Companies (HFCs)
Company subject to which certificate is granted and observance by the Company of the provisions of the Act and the directions/guidelines issued there-under. XI.1.3 During the year, the Certificate of Registration was granted to 5 new HFCs viz. Home First Finance Company India Pvt. Ltd., Aadhar Housing Finance Pvt. Ltd., Equitas Housing Finance Pvt. Ltd., Muthoot Housing Finance Company Ltd. & Shubham Housing Development Finance Company Ltd. As on June 30, 2011 the total number of HFCs registered with NHB stood at 52 of which 33 companies have been granted Certificate of Registration without permission to accept public deposits. XI.1.4 During the year Bank has cancelled the Certificate of Registration of 5 companies. Aindri Housing Finance & Pvt. Limited, SRS Housing Finance Limited & Utkal Housing Finance Limited surrendered their Certificates of Registration, as they were not undertaking housing finance business. Further, IDBI Home Finance Limited surrendered the CoR as the company is merged with the parent Bank. The Certificate of Registration of Jahnavi Home Development and Finance Limited was cancelled due to its non compliance with the Directions/Guidelines issued by the Bank. Notification of HFC under the SARFAESI Act: During the year 2010-11, India Infoline Housing Finance Limited has been notified under the SARFAESI Act by Ministry of Finance, Government of India. Supervision of HFCs NHB supervises the working of HFCs through a system of on-site inspections, market intelligence and off-site surveillance for which periodic returns have been prescribed. During the year, the Bank inspected 44 HFCs, out of which 36 were regulatory inspections to ensure compliance of the provisions of the Act and the Directions/Guidelines thereunder and 8
XI. XI.1
XI.1.1 The HFCs, which are dedicated institutions for housing finance in the country, are regulated and supervised by the National Housing Bank under the provisions of the National Housing Bank Act, 1987 and the directions and guidelines issued thereunder from time to time. The measures of regulation include stipulation of prudential norms, transparent and standardized accounting and disclosure policies, fair practice code, asset liability management and other risk management practices etc. These measures have helped to ensure the development of the sector on healthy and sustainable lines. XI.2 Registration/Cancellation of CoRs for HFCs Companies desirous of commencing the business of housing finance are required to obtain a certificate of registration from the National Housing Bank. The certificate is granted after the Bank is satisfied that the applicant companies fulfilled the conditions for grant of such certificate prescribed under the National Housing Bank Act, 1987. The continuance of the registration depends on the continued compliance of the conditions by the
XI.1.5
XI.2 XI.2.1
XI.2.2
131
were in connection with the grant of Certificate of Registration to new companies. Close monitoring of the submission of quarterly, half-yearly and annual returns by HFCs was undertaken. XI.2.3 The Bank vide its Circular dated May 01, 2007, specified minimum Net Owned Fund (NOF) of ` 2 crore for a housing finance company which carries on the business of housing finance by March 31, 2008. As on date Ind Bank Housing Ltd. is the only company having NOF less than `2 crore. Ind Bank Housing Ltd. confirmed that it was not undertaking any new housing finance business. XI.3 Important Notifications XI.3.1 Increasing the requirement of minimum NOF The Bank vide its Notification No. NHB.HFC.REG-4/CMD/2011 increased the requirement of minimum NOF of HFC from `2 crore to `10 crore to be eligible to commence or carrying on the business of HFI on or after June 18, 2011. XI.3.2 The Bank has also specified the minimum NOF requirement for all the existing registered HFCs desirous of carrying on the business of housing finance institutions beyond March 31, 2014 in the following phased manner(i) (ii) (iii) XI.4 ` 4 crore by June 30, 2012, ` 7 crore by June 30, 2013 and ` 10 crore by March 31, 2014 Revised KYC Guidelines, Anti Money Laundering Measures, Fair Practices Code & Asset-Liability Management System
11, 2010. The new Guidelines include all aspects of loan sanctioning, disbursal and repayment issues, in order to bring more clarity and transparency. The new Fair Practices Code is in alignment with the RBI Code for NBFCs in the related areas. XI.4.3 Further, Bank has also issued revised Guidelines on Asset-Liability Management System for HFCs vide Policy Circular No.35/2010 dated October 11, 2010. The revised ALM guidelines are applicable to all HFCs irrespective of whether they are accepting / holding public deposits or not. XI.4.4 Keeping in view the direction received from Government of India, Ministry of Finance and taking into account the discussions held with CEOs of HFCs, NHB has issued directive to all HFCs not to charge any prepayment charges/prepayment penalty in case the outstanding loan amount is paid by the borrowers out of his/her own sources (Circular No- NHB (ND)/DRS/Pol-No-36/2011 dated October 18, 2010). XI.4.5 Keeping in view the latest provisions of RBI applicable to Commercial Banks, NHB has also issued the Circular No- NHB (ND)/DRS/Pol-No-37/2011 dated December 24, 2010 on LTV Ratio, Risk Weights and Provisioning requirements etc. XI.4.6 Bank has advised all HFCs vide its Circular No-NHB(ND)/DRS/Misc./Cir No.2/8792 /2010 dated December 28, 2010 to become member of at least one credit information company and provide them the current data in accordance with the provisions of the Credit Information Companies (Regulation) Act, 2005 and the Rules/Regulations framed thereunder. HFCs are also advised to ensure that no wrong data/ history regarding borrowers are given to Credit Information Companies. XI.5 Coordination with Other Regulatory Authorities
XI.4.1 During the year, the Bank has issued revised Guidelines on 'Know Your Customer (KYC)' & 'Anti Money Laundering (AML) Measures' for HFCs vide Policy Circular No.33/2010 dated October 11, 2010. The Bank has issued the revised guidelines in the light of subsequent developments including amendments in the Prevention of Money Laundering Act and Rules framed there under. XI.4.2 The Bank has also issued revised Guidelines on Fair Practices Code vide Policy Circular No. 34/2011 dated October
XI.5.1 For the holistic integration of the housing finance sector with other financial institutions, NHB continued to engage with other Regulatory Authorities through State
132
Level Coordination Committee (SLCC) meetings convened by the Reserve Bank of India, the Police Department, officials of the State Government in Ministries / Department of Home Finance, Law, Economic Offences Wing, Registrar of Companies, Company Law Board, Securities and Exchange Board of India, Institute of Chartered Accountants of India at State/Regional levels etc. During the year 2010-11, NHB participated in the State Level Co-ordination Committee meetings convened by the Regional Offices of RBI for the States of Delhi, Andhra Pradesh, Haryana, Jharkhand, Jammu and Kashmir, Madhya Pradesh, Gujarat, West Bengal, Rajasthan, Orissa, Assam, Himachal Pradesh, Punjab and U.T. Chandigarh. XI.6 Other Activities XI.6.1 Meeting with Major HFCs: Housing Loan for bribery case - A meeting of Chief Executive Officers of 22 major Housing Finance Companies was held on December 8, 2010 to discuss, inter-alia, the process of sanctioning, disbursal, post disbursal monitoring, security, strengthening of internal mechanism and process, etc. After detailed discussions, the Bank has advised all the HFCs to ensure the strengthening of their loan process. Further, the Bank vide letter dated February 14, 2011 has also introduced a special quarterly return on HFCs top 10 major exposures to corporates / builders/companies etc. XI.6.2 Training Programme for Auditors of HFCs- A comprehensive training programme was organized exclusively for the Auditors of Housing Finance Companies in Jaipur in August, 2010 with the coordination and support of the local chapter of ICAI. The aim of the Programme was to sensitize and apprise the auditors on t h e r e q u i r e me n t s of H F C s u n de r applicable provisions under NHB Act, 1987 and other directives under Housing Finance Companies (NHB) Directions, 2001. The programme was very well received by the participant auditors.
XI.6.3 Training Programme on Asset Liability Management (ALM) for all HFCs Recognizing the importance of Asset Liability Management in the smooth functioning of the Housing Finance Companies, a workshop for all the HFCs on ALM system was organized on 25th and 28th February, 2011. The objective of the Programme was to enable the participants to understand the need, role, scope and relevance of ALM function in their overall business management. There was an overwhelming response as it was attended by the various executives in the Junior and Middle Management Grade from almost all the HFCs. XII. XII.1 Business Planning and Promotion Activities Complaint Redressal Mechanism
XII.1.1 The Bank has set up Complaint Cell to ensure prompt redressal of customer complaints and grievances against HFCs. Further, the Bank has also uploaded the complete details on NHB Website (www.nhb.org.in/Regulation/Complaint _Cell) regarding role of the Complaint Cell for addressing the complaints received from public against HFCs. XII.1.2 National Housing Bank is also a member organization of the Centralized Grievance Redress and Monitoring System (CPGRAMS) of Department of Administrative Reforms and Public Grievances (DARPG) which is aimed to providing citizens with a platform for redressal of their grievances. The complaints received on PG Portal related to NHB are being monitored on a regular basis and are promptly disposed off. XII.1.3 During the financial year 2010-11, the Bank had received a total of 432 complaints, out of which 412 complaints have been settled. For the pending 20 complaints constant monitoring is on with the concerned HFCs for early disposal.
133
XII.2
Meeting with CEOs of HFCs and Senior Officials of PSBs including select RRBs
XII.2.1 As a regular practice, NHB organises meetings with the Chief Executives of Housing Finance Companies and Senior Officials of Public Sector Banks including select Regional Rural Banks on a periodic basis as also as and when required in order to recognise and review the various developments in the housing and housing finance sector. XII.2.2 During the year 2010-11, two such meetings were organized by NHB to discuss and review the developments of the sector
stakeholders with developments in the sector global as also national through Presentations made by experts in the sector. XII.2.3 Further, considering the focussed entry of the Regional Rural Banks (RRB's) in rural housing finance, exclusive session for RRBs was convened during each of these two meetings. During these sessions, the developments and role of RRBs in rural housing as also their delivery mechanisms in addressing the problems of the rural housing sector were acknowledged and appreciated. XII.3 World Habitat Day Celebrations 2010 XII.3.1 The United Nations has designated the first Monday in October every year as World Habitat Day to reflect on the state of human settlements and the basic right to adequate shelter for all. It is also intended to remind the world of its collective responsibility for the future of the human habitat. This year, the World Habitat day was celebrated on October 4, 2010 with the theme Better City, Better Life.
Shri R.S. Garg, GM, NHB addressing the CEOs of HFCs & Senior Officials of PSBs
during the year 2010-11. Besides deliberating on sectoral issues and the concerns of the Primary Lending Institutions, these forums were utilized to understand the needs of the lending institutions. Further, issues of mutual interest like Rural Housing viz. Golden Jubilee Rural Housing Finance Scheme (including performance of PLIs under the Scheme) and Rural Housing Fund, Affordable Housing, Reverse Mortgage Loan-Annuity Product, housing and housing finance for the poor, Interest Subsidy Scheme for Housing the Urban Poor (ISHUP), 1per cent interest subvention scheme, grievance redressal mechanism, central electronic registry, energy efficient residential housing and other research and development activities were also discussed and reviewed during these meetings. The meetings were also used as a platform to provide the
XII.3.2 The National Housing Bank has been celebrating the World Habitat Day every year as an annual event through various activities viz. Essay Competition, release of booklet containing award winning essays, Habitainment Quiz etc. XII.3.3 Essay Competition: During the year 201011, an essay competition was conducted by NHB to celebrate the World Habitat Day 2010. The following three topics of the Competition were based on the theme of the WHD viz. Better City, Better Life: 1. Inclusive Development is a Pre-requisite for the Formation of a Better City and Ensuring Better Life. Smart Cities are built on the foundation of Efficient Houses and Buildings. Role of Housing and Housing Finance towards Ensuring a Better City and Better Life. The Competition was open to all employees of All India level financial institutions, Housing Finance Companies registered with the National Housing Bank and
2. 3.
134
Banks. Further, to felicitate the winners of the World Habitat Day 2009 Essay Competition, a prize distribution ceremony was organised on October 04, 2010 at NHB, New Delhi. XII.3.4 Habitainment Quiz: Besides the Essay Competition, a fun-filled event called Habitainment Quiz 2010 was also
Tourism, Kumari Selja and Shri R. V. Verma, Chairman and Managing Director, National Housing Bank. XII.4 Development and Research Advisory Committee XII.4.1To review, guide and advise the development activities of the Bank viz research studies, economic analysis, capacity building initiatives etc as also provide feedback on the Bank's new initiatives, a Development and Research Advisory Committee was constituted by the Bank in the year 2008. The Committee is chaired by CMD, NHB and has four external experts besides the ED of NHB as members. The fifth meeting of the Development and Research Advisory Committee of NHB was convened on March 28, 2011 at New Delhi. During the Meeting, the issues pertaining to research and development activities of NHB were discussed. These included Residex, Valuation Standards, NHBs Five Year Business Plan, Establishment of a Training and Research Institute, Asia Pacific Union for Housing Finance (APUHF) etc. XII.5 Promotional Programme for Energy Efficient New Residential Housing in India
Habitainment Quiz 2010 at India Habitat Centre, New Delhi
organized by NHB on the occasion of WHD 2010. The quiz was open to the institutional and individual members of the India Habitat Centre. The idea behind the event was to raise awareness on the significance of World Habitat Day and to provide an opportunity to the employees and members of India Habitat Centre to bond in a fun-filled and informative event. The event witnessed participation from over 100 teams from amongst the various
Release of NHBs Award Winning Essays by Kumari Selja, Minister of Housing & Urban Poverty Alleviation & Tourism
XII.5.1 The National Housing Bank (NHB) executed an Agreement with KfW, Germany (the development Bank of Germany) to promote energy efficient housing in India. The Agreement was signed between the two agencies at New Delhi on December 31, 2010 under which NHB will borrow an amount of EURO 50 million comprising EURO 12 million under concessional IDA window and balance EURO 38 million under the normal window. XII.5.2 This initiative is an outcome of the continued dialogue between Government of India and Federal Republic of Germany for promotion of a Programme on Energy Efficient New Residential Housing in India with NHB acting as the programme implementation agency, in its capacity as the apex housing finance body.
institutional and individual members. XII.3.5 Launch of NHB-AWE 2010: The 2010 edition of the NHB-AWE booklet was released at a function organized by the Ministry of Housing and Urban Poverty Alleviation by the Hon'ble Minister of Housing and Urban Poverty Alleviation &
135
XII.5.6 The Programme is expected to address a niche market segment for promoting energy efficiency in the housing sector in the country and will seek to serve the Government's overarching environment related goals. XII.6 Risk Management XII.6.1 The Bank has its Risk Management System in place to monitor the risk of the Bank. For this purpose the Bank has constituted the following Committees: (i) Asset Liability Management Committee (ALCO) which monitors the management of market risk of the Bank. Credit Risk Management Committee (CRMC) which monitors the credit risk of the Bank
NHB Signs Agreement with KfW, Germany for Promoting Energy Efficient Housing
XII.5.3 As per estimates, the residential housing sector accounts for approximately 30per cent of the total energy consumption in the country. Promotion of Energy Efficient residential housing is also an important objective laid down in the National Urban Housing and Habitat Policy, 2007, formulated by the Government of India, Ministry of Housing and Urban Poverty Alleviation. XII.5.4 Considering it to be a new market in India, KfW and NHB conducted a feasibility study to assess the potential market for such Programme, including the lending programme through NHB. Based on the findings of the feasibility study, the crucial features of the Promotional Programme were designed which inter-alia envisage NHB's lending for individual housing loans through Primary Lending Institutions (PLIs) for purchase of apartments in certified energy efficient projects. The Programme seeks to save energy levels in residential housing to the extent of 30per cent through both active and passive measures viz. adopting an efficient architectural design, using construction material of required standards, installing energy efficient electrical, electronic appliances etc. XII.5.5 Further, NHB and KfW have appointed an international consultant for design and development of the assessment tool for the Programme. The same is proposed to be carried forward for introduction of standards and regulatory certification tools and processes, eventually, to come on par with the best international regulatory standards.
136
(ii)
(iii) Operational Risk Management Committee which monitors the operation risk of the Bank. XII.6.2 The Bank has a Board appointed Risk Management Advisory Committee (RMAC) with three external members who are experts in matters concerning Banking and Finance. During the year 2010-11, the Committee met four times to review the Bank's risk management Policies and functions in relation to the three areas of risk mentioned above. XII.7 Regional Office/Regional Representative Offices XII.7.1 The Bank has one Regional Office (RO) at Mumbai and seven Regional Representative Offices (RROs) each at Hyderabad, Chennai, Bangalore, Kolkata, Lucknow, Ahmedabad and Patna. The Patna RRO was opened during the year 2010-11. XII.7.2 The role of RO/RROs is to assist the Head Office (HO) of the Bank in various activities viz. business development, building relationship with the Government agencies, Banks, Financial Institutions, Housing Finance Companies, MFIs, NGOs etc, representing HO in various meetings/seminars/conferences,
inspection etc. Besides this, Mumbai Regional Office also acts as the DR Site of the Bank and contributes to some financial operations of the HO. XIII Capacity Building XIII.1 Capacity building and sensisting the personnel in the Sector has been one of the many endeavours of the National Housing
Training Programme on 'Mortgage Finance for Homes' for Women Executives
Housing Finance' besides 'Risk Management and Asset Liability Management'. For the first time in its history, the Bank held a training programme exclusively for women. Titled 'Mortgage Finance for Homes', the training programme drew appreciation from all corners. Important issues like 'Prevention of Frauds' and 'KYC-FPC' which have been engaging the attention of the financial sector in the country were also discussed at length in the programmes conducted by NHB by way of dedicated programmes. Topics like 'Customer Service' were introduced in the syllabus to give the participants a better understanding of behavioural issues. XIII.4 As an exclusive Capacity Building initiative for Regional Rural Banks and Micro Finance Institutions, the Bank conducted eight dedicated training programmes defraying the entire expenses. These programmes act not only as the platform for exchange and dissemination of knowledge, but also perform as vehicles of goodwill and publicity for the Bank. XIII.5 The programmes have been organized in different regions so as to give a wider geographical coverage in terms of participation. During the financial year, programmes were conducted in Ahmedabad, Ooty, Bhubaneswar, Bengaluru, New Delhi, Agartala, Naharlagun (Arunachal Pradesh), Nagpur, Patna, Raebareilly (Uttar Pradesh), Mumbai, New Delhi, Kannur (Kerala), Visakhapatnam and Chamba (Himachal Pradesh). XIV Corporate Communications XIV.1 The Corporate Communications of the Bank have been aimed at increasing its brand awareness and visibility by associating the Bank's functions directly with the consumers. The initiatives under corporate communications include sponsorship of events, tie-up as knowledge partners with other corporates, regular interactions with the electronic and print media, corporate advertisements and press
Bank since its inception. A multi pronged strategy has been adopted to address the needs of this Sector with regard to training and development of personnel working in the Sector. Besides conducting training programmes, seminars and symposiums providing design and faculty support as well as sponsoring programmes conducted by other institutes remains one of the strong pillars of NHBs promotional and development roles. These programmes are on subjects related to housing and other current topics relevant to the sector for the officials of HFCs, banks, and co-operative Sector institutions. XIII.2 During the year, the Bank has organized fifteen training programmes, the highest in any calendar year till date. More than 400 participants, which is also the highest for
Training Programme on 'Rural Housing Finance'
any financial year, from various PLIs viz. Housing Finance Companies, Banks, Regional Rural Banks and Micro Finance Institutions participated in these training programmes. XIII.3 The training programmes covered topics related to housing finance such as 'Rural Housing Finance' and 'New Products in
137
releases for various initiatives of the Bank. XIV.2 Advertisements in the regional magazines helped the Bank cover a wider audience base and helped build a brand image. The Bank was featured from time to time in the national and regional media for its schemes and initiatives in the housing finance sector. The events organized by the Bank made its corporate presence felt amongst the related institutions. XV Residential Mortgage Backed Securitization (RMBS)
XV.3 Redemption of RMBS pool During the financial year 2010-11, the Class 'A' PTCs of one of the residential mortgage backed securitization transaction of ` 77.16 crore have been fully redeemed and the Special Purpose Vehicle Trust has been successfully closed. XVI XVI.1 XVI.1.1 New Initiatives File Tracking System File Tracking System - FTS (Ver 4.0) is a web based multilingual application which helps in tracking the movement of files and receipts. The application enables the users to maintain a consistent watch over the movement of various important Files and Receipts at different levels in the process of decision-making. The salient features of the system are as follow:
? of the receipts Diarising ? of new files Opening ? the receipt to a file Linking ? Files/Receipts Movement ? Retrieval of information through
XV.1 NHB has so far completed fourteen residential mortgage backed securitization (RMBS) transactions involving 38,809 individual housing loans of six Housing Finance Companies (HFCs) and one Scheduled Commercial Bank, amounting to ` 862.20 crore. The success of the issues of RMBS has significantly provided a means to better understanding and addressing the various legal, regulatory, fiscal, accounting and other capital market related issues relating to such transactions as also various policy issues for a conducive environment for such issuances. The structure of NHB's RMBS issues has been designed under the provisions of the National Housing Bank Amendment Act, 2000 (Sections 14 (ea), 14 (eb), 14 (ec) and 18), which authorize the Bank to carry out securitization transactions and issue mortgage backed securities as trust certificates of beneficial interest and act as Trustee for the holders of such securities. XV.2 Performance of the Pools of Housing loans Securitized NHB has appointed the respective originators as Servicing and Paying Agents (S and P Agents) to ensure that collections in respect of each of the pool of securitized loans are distributed to the respective PTC holders and Service providers. The yields to Class A PTC holders have been consistent with that indicated at the time of issuances.
powerful Search
? management Record ? of Files/Receipts Dispatch ? Generation of reports
XVI.1.2
With the aim of systematically maintaining and controlling information from its creation to disposal, and establishing an efficient and effective mechanism for storing and retrieving information, the Bank has procured National Informatics Centre's File Tracking System software (FTS). The Software has been implemented in the Bank in a phased manner. In Phase I, letter movement system was implemented and since January 2011 all letters/receipts received and dispatched are routed through FTS. Currently, implementation of Phase II is under way.
138
XVI.2
Refinance Scheme for Promoting Energy Efficient Housing As a part of its joint initiative with KfW of Germany to promote energy efficient housing in the country, the Bank has launched a refinance scheme for Housing Finance Companies and Bank for their housing loans extended for certified new energy efficient housing units. With a number of new energy efficient housing projects coming up across the country, this Scheme is expected to catalyze the market for energy efficient housing units.
XVII.1.3
XVII XVII.1 XVII.1.1
Reverse Mortgage Loan Reverse Mortgage Loan (RML) NHB conceptualized Reverse Mortgage Loan Scheme and formulated the Operational Guidelines for RMLs in India in May 2007 to enable the Scheduled Commercial Banks
The Scheme is meant for the Senior Citizen borrower(s) over the age of 60 who can mortgage the house property to a bank/HFC, which then makes periodic payments to the borrower(s) during the latter's lifetime for a maximum period of 20 years. The Senior Citizen borrower is not required to service the loan during his lifetime and therefore does not make monthly repayments of principal and interest to the lender. Only on the borrower's death or on the borrower permanently leaving the house property, the loan is repaid along with accumulated interest, through sale of the house property. The borrower(s)/heir(s) can also repay or prepay the loan with accumulated interest and have the mortgage released without resorting to sale of the property. As per information available, as on June 30, 2011, 23 Banks and 2 HFCs have launched the RML Scheme and ` 1740 crores have been sanctioned to 8903 senior citizen borrowers.
XVII.1.4
(SCBs) and Housing Finance Companies (HFCs) extend RML to senior citizens to help them avail of monthly stream of income against mortgage of his/her house. The Central Government notified the Reverse Mortgage Scheme vide its notification No. S.O. 2310 (E) dated 30th September, 2008. XVII.1.2 Conceptually, a Reverse Mortgage Loan enables the conversion of the owner's equity in his/her otherwise illiquid house asset and get a stream of fund inflows throughout the life time for meeting increased living expenses, while at the same time allowing the individual to continue to occupy the house.
139
Reverse Mortgage Loan Seminars organized by NHB
XVII.2 XVII.2.1
Reverse Mortgage Loan enabled Annuity (RMLeA) RMLeA was launched by NHB in association with Star Union Dai-ichi Life Insurance Company Ltd., (SUD Life) and Central Bank of India (CBI) in December 2009. RMLeA ensured assured life-time annuity payments to the senior citizens bettering the RML which allowed maximum payment
tenure of 20 years. The Scheme sources life-time annuity for the senior citizens from a life insurance company through the Bank/HFC. XVII.2.2 NHB has formulated RMLeA's Operational Guidelines for implementation by Primary Lending Institution. The RMLeA Scheme has also been implemented by Central Bank of India and Union Bank of India in association with Star Union Dai-ichi Life Insurance Co. Ltd. Reverse Mortgage Counselling Centres NHB continues with its endeavours to promote the RML programme by way of Counseling Programs and Seminars for the elderly citizens of the country to generate awareness amongst them and to enable them to take informed decision for availing RMLs. During the year 2010-11, NHB has organized and conducted 16 Seminars for the senior citizens in various cities of India. NHB has opened ten RML Counseling centers, out of which three RML Counseling Centres were opened during 2010-11, in nine Indian cities viz. Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi (2), Hyderabad, Kolkata, Lucknow and Mumbai, in association with eminent Non Government Organisations working for the elderly. NHB has also been working towards building the capacity in the commercial banks and HFCs for implementing the product by way of its training programmes and seminars for the personnel of these institutions. NHB has been carrying on with its advocacy on various issues concerning implementation of the RML. Significant among them was the issue relating to taxation which was pursued with the Central Government, eventually leading to tax exemption of the payment received under RML by the senior citizen borrower.
XVIII Information Technology Initiatives XVIII.1 XVIII.1.1 Portals The Bank maintains its website at www.nhb.org.in which provides information about the Bank and its core and corporate functions. This website is supplemented by Housing Information Portal (HIP) which is a single point source of information for housing and related activity across the country. The link of HIP has been provided in NHB Website. Housing Information Portal (HIP) plans to create a repository of information about the processes related to housing and housing finance and publish it on the portal for the benefit of a wide spectrum of users, thereby integrating the flow of information on these subjects.
XVII.3 XVII.3.1
XVII.3.2
XVIII.1.2 The portal was planned to be implemented in three phases. The first phase lays focus on individual buyer/seller/renter of property; the second phase is identified for Investors and Business Partners and the third phase is for Policy Makers and Professionals. XVIII.1.3 The development of all the three phases of HIP has been completed and all contents have been uploaded on the portal for public access (www.housingindia.info). The contents are being periodically reviewed/updated as per the review schedule during maintenance phase. The HIP serves as a window not only for a prospective buyer of property but also for those setting up a Housing Finance Company, developing a Real Estate Project, formulating policy guidelines for this sector, etc. as also for housing and housing finance professionals.
XVIII.1.4
XVII.3.3
XVIII.1.5 The Bank has also developed a knowledge sharing and information portal for Asia Pacific Union for Housing Finance (APUHF) which is available at www.apuhf.info. The link
140
of APUHF portal has also been provided at NHB's website. Asia Pacific Union for Housing Finance (APUHF) is a platform to act as a knowledge sharing and networking medium. The forum intends to promote coalition and coordination among the South Asia and Pacific countries in determining their housing and housing finance solutions. It also tracks the events and happenings in the housing markets globally. XVIII.1.6 To enrich APUHF website with country specific contents on housing and housing finance so that the experience of different countries may be shared, a Country Specific Section has been developed on this web site. At
operations through SAP solution. The Bank planned to deploy SAP in Bilingual manner so that all data entry and report generation is possible in Hindi as well as in English. The implementation of this project has been completed. This project also promotes Bank's initiatives towards increasing the use of Rajbhasha (Hindi) in official work. XVIII.2.3 In-house Software Development: Although SAP is becoming the basic platform for enterprise wide integration of information, there are areas where various departments require additional computer support. The Bank developed following software application in-house during 2010 & 2011:
? Reconciliation Software for Claim
H.E. Suharso Monoarfa, Minister of Housing Republic of Indonesia, and delegates visit National Housing Bank Head Office at New Delhi
present, this section has been enriched with the contents pertaining to India, Pakistan and Indonesia. XVIII.2 IT Projects XVIII.2.1 MPLS Connectivity for entire Bank: The Bank has established Multiprotocol Label Switching (MPLS) connectivity across its offices to make its network infrastructure robust, and secure. The MPLS connectivity has been established at HO, MRO and six Regional Representative Offices (RRO). For newly opened Regional Representative Office at Patna, the implementation is in process. The MPLS implementation for NDS application provided by RBI has also been completed. XVIII.2.2 SAP Bilingual: National Housing Bank has integrated its business XVIII.3 XVIII.3.1
1per cent Interest Subvention Scheme: Government of India has appointed NHB as a nodal agency for 1per cent Interest Subvention Scheme for Housing Loan upto ` 10 lakh. Being a nodal agency, NHB receives claims for the aforesaid Scheme from selected Banks and HFCs. Bank has developed a web based application in-house to facilitate the reconciliation of claims to ensure compliance with the check list and to provide MIS for future reference. Information Security Enforcement of Information Security Measures: The security of Bank's IT infrastructure is guided by the directions laid down in the Information Security Policy (ISP). ISP gives directions towards implementation of Information Security Framework for the Bank. The implementation status of IS Policy is verified by a third party IS-Auditor every year during its annual IS-Audit. For the year 2010-11, the IS Audit exercise has been completed and Audit compliance certificate has been issued by the Auditors. To ensure continuity of the business in a challenging
141
scenario and to minimise the likelihood of occurrence and impact (risk) of business interruptions, the Bank has initiated the process of preparing Business Continuity Planning (BCP) for the Bank as a whole. Under this, the document covering the business process of various departments has been prepared which was finalized by the IT Committee. In the 2nd phase, the document pertaining to Risk Assessment, Mitigation & Contingency Plan is under preparation. These will be integrated to prepare overall BCP document for the Bank. XVIII.3.2 I m p l e m e n t a t i o n o f V i d e o Conferencing Solution: The Bank has implemented MPLS in order to establish reliable and secured connectivity across its offices. The Bank has planned to utilize this robust Wide Area Network (WAN) towards implementation of Video Conferencing Solution (VCS) for its offices. Pan- India meetings of NHB offices can be organized through video conferencing. The offices can communicate through video conference with other organizations / third party, using ISDN / Internet facility. Tendering process has been completed for selecting the implementation partner for this project. XVIII.3.3 Development of Intranet site: The Bank is in the process of developing a web-application in-house to establish a separate intranet site for all applications which are only accessible to NHB officers. The intranet portal will be integrated with Bank's web-site through a password protected section so that designated officer can also access applications/files related to his/her work area from outside the office premises. The development of the web application has been completed and is accessible to all NHB
offices over MPLS network. The access of this intranet application through NHB web-site will require add-on security infrastructure. XIX. XIX.1 XIX.1.1 Development & Promotional Initiatives Asia Pacific Union for Housing Finance (APUHF) Asia Pacific Union for Housing Finance (APUHF) is a platform to act as a knowledge sharing and networking medium. The Union intends to promote coalition and coordination among the Asia Pacific countries in determining their housing and housing finance solutions. APUHF also tracks events and happenings in the housing markets globally. The Union focuses on initiatives taken by the different member countries in their own regional contexts. The users of the platform include member country institutions engaged in housing and housing finance such as housing finance institutions, construction agencies, cooperatives, Government agencies, policy and regulatory bodies, Central Banks, International Finance Institutions etc. National Housing Bank, India hosts the Secretariat for the Asia Pacific Union for Housing Finance. NHB is responsible for updating the content of the portal in consultation with the member countries in the Advisory Board. Box IV Genesis and Launch of the Asia Pacific Union for Housing Finance A workshop on Housing Finance in South Asia was conducted jointly by the World Bank and IFC during May 27-29, 2009 at Jakarta, Indonesia. During the course of the workshop the proposal for establishing an e-platform for South Asia Region was discussed between National Housing Bank, India and World Bank with interest and support from other member countries.
XIX.1.2
142
The proposal was jointly announced by the World Bank and NHB at the Workshop and the proposal was well received by all participating member countries. It was proposed and accepted by all participating countries that the initiative be termed as 'South Asia Housing Finance Forum' (SAHF). UNESCAP and UNHABITAT, in collaboration with National Housing Bank of India (NHB), launched an initiative on Pro-Poor Housing Finance in Asia-Pacific region around the same time. Both the above initiatives are merged into a single Regional Network and the name of the network was changed to Asia Pacific Union of Housing Finance (APUHF). The National Housing Bank (NHB) in association with the World Bank and International Finance Corporation (IFC), organized a International Conference on Affordable Housing and Housing Finance during January 27-28, 2010 at New Delhi. The Conference had participants and speakers from Afghanistan, Bangladesh, Brazil, India, Indonesia, Maldives, Mauritius, Pakistan, Sri Lanka, South Africa and Thailand besides IFC, World Bank and World Bank Institute, Affordable Housing Institute, ADB, Government of India Central and State Government Officials, Reserve Bank of India, Banks & Housing Finance Companies. Representatives from Civil Society Organizations, academia, researchers and policy makers also participated in the Conference. The Conference was preceded by Launch of South Asia Housing Finance Forum (SAHF Forum), a Knowledge sharing and Information Portal, developed by the National Housing Bank. The launch was done by Governor Abdul Qadeer Fitrat, of Central Bank of Afghanistan in the presence of the Special Invitees and the delegates of the Conference.
XIX.1.3
Meeting of the Advisory Board of the APUHF was held in November 2010 at New Delhi. Different aspects of the working of Network were discussed at the meeting along with the way forward for the Union. Asia Pacific Union of Housing Finance (APUHF) in association with Mongolian Mortgage Corporation (MIK), KfW and Frankfurt School of Finance & Management organized a Workshop on Housing Finance during June 26-29, 2011 at Ulaanbaatar, Mongolia. Participants of the Workshop on Housing Finance included international housing finance experts from housing finance institutions representing countries viz. Thailand, Philippines, Japan, Azerbaijan, Indonesia, Malaysia and Mongolia besides India. Representatives from UN-HABITAT, IFC and NHB also attended the workshop. Latest information, expert perspectives and insights on compelling topics confronting the policy makers, national governments, financial institutions and research bodies were on offer during the workshop. The Workshop showcased overview of best practices together with specific country perspectives adaptable to local contexts. Study on Housing Finance Portfolio of Scheduled Commercial Banks Trend Analysis 2005-09 A study on housing finance portfolio of SCBs was conducted by the National Housing Bank to capture the trend analysis of housing loans of SCBs during the period 2005-09. The Study was conducted based on the information available in the various Basic Statistical Returns of the Reserve Bank of India.
XIX.1.4
XIX.2
XIX.2.1
143
Box V Key Highlights of the Trend Analysis of Housing Finance Portfolio of SCBs 2005-09 Growth in Housing Finance
? The number of loan accounts (proxy for
31/03/2005 to 26.70per cent as on 31/03/2009.

? of Metropolitan areas increased Share
from 47.30per cent as on 31/03/2005 to 52.02per cent as on 31/03/2009.

? group wise information indicates Bank
number of houses) increased from 36.66 lakh as on 31/03/2005 to 57.10 lakh as on 31/03/2009, registering a CAGR of 9.27per cent only.
? Housing loans credit limits registered a
CAGR of 18.49per cent.

? Average Credit Limit increased from
`3.96 lakh to `5.93 lakh registering CAGR of 8.41per cent.

? Outstanding housing loans increased
that of the total outstanding housing loan portfolio, the share of rural areas has gone down in respect of all Bank groups viz. SBI Group (from 13.89per cent to 10.28per cent), Nationalized Banks (from 9.86per cent to 6.93per cent), Other SCBs (from 7per cent to 4.47per cent ), RRBs (marginally from 4.62per cent to 4.57per cent) during the period 2005-09. Bank-Group Wise Distribution
? on 31/03/2005, the nationalized As
from `1,26,797 crore as on 31/03/2005 to `2,84,750 crore as on 31/02/2009 registering a CAGR of 17.56per cent.
? Average loan outstanding increased
from ` 3.46 lakh to ` 4.99 lakh registering a CAGR of 7.60per cent.

? A significant shift observed towards
loan category of more than `10 lakh and above during the period 20052009. As at end March 2009, such accounts stood at 52.5per cent of the total loan amount as against 35per cent as on March, 2005.
? Predominantly, the percentage of loan
banks retained maximum share of 37.45per cent in the total outstanding housing loans of all SCBs followed by the SBI Group at 27per cent. As on 31/03/2009, both the nationalized banks and SBI Group retained their major shares as 38.68per cent and 25.60per cent respectively. Together, Nationalized Banks and SBI Group account for more than 64per cent of the total outstanding housing loan portfolio as on 31/03/2009.
? Nationalized Banks and the SBI The
accounts in the category `25,0002,00,000 have dominated the banks portfolio during the period 2005-2009, however down from 44.83per cent as at end March 2005 to 34.86per cent as at end of March 2009. Urban Rural
? share of rural areas in housing The
Group also dominate their share in rural areas amongst the housing loan portfolio of all SCBs with around 36per cent each which has more or less remained at the same level during the period 2005-2009. Regional Distribution
? at end March 2009, the Southern As
finance during the period 2005-2009, has come down from 10.27per cent as in March 2005 to 7.13per cent in March 2009.
? of semi-urban areas has declined Share
from 15.21per cent as on 31/03/2005 to 14.14per cent as on 31/03/2009.

? of urban areas has marginally Share
declined from 27.21per cent as on
region accounted for maximum share of 38.77per cent of the total outstanding housing loan of SCBs, followed by the Western region at 24.54per cent, Northern region at 18.07per cent, Central region at 9.17per cent, Eastern region at 8.21per cent and N-E region at 1.23per cent as against the figures of 37.33per cent, 23.26per cent, 18.85per
144
cent, 10.36per cent, 8.80per cent and 1.40per cent respectively as at end March 2005.
? During the period 2005-2009, there has
not been much variations in these regions over the period. Priority Sector Lending
? During the period 2005-09, the share of
outstanding priority sector housing loans in overall outstanding priority sector lending of SCBs noticed a continuous rise every year except the year 2009 when it declined from 27per cent to 22per cent.
? In terms of share of outstanding housing
loans under priority sector in overall outstanding gross bank credit of SCBs, the same showed a fluctuating trend over the period 2005-09 i.e. it increased from 8.63per cent in 2005 to 9.21per cent in 2006 before declining to 8.68per cent in 2007. It further progressed to 9.04per cent in 2008 and finally declined to 7.67per cent in 2009. Study on Housing Finance Portfolio of Housing Finance Companies XIX.3.1 With an objective to capture the trend being followed by housing loan portfolio of the Housing Finance Companies over the period 2007-08 to 2009-10, a study on the same was conducted by the National Housing Bank during the year 2010-11. The inputs to the study were taken from the information submitted by HFCs to NHB by way of various returns as regulatory and supervisory compliance. The key findings of the Study are: ? outstanding housing loans of HFCs The witnessed a 40per cent growth over the period 2007-10; ? of the total outstanding housing Out loans of HFCs, the share of NHBs refinance outstanding increased from 4.11per cent in 2007-08 to 6.83per cent in 2009-10. ? share of housing loans extended by The HFCs to individuals in rural areas showed an increasing trend over the year 2007-08 to 2009-10, thus showing XIX.3
an increasing penetration of HFCs in the rural housing finance market. ? housing loans extended by HFCs in The rural areas for up-gradation purposes are on rise indicating towards conversion of Kutcha houses into Pucca houses. ? borrowings of HFCs registered a The growth of approximately 32per cent over the period 2007-10. ? borrowings of HFCs from NHB The increased from `1532 crore to `3518 crore over 2007-10 thus registering a growth of approximately 130per cent. ? Amongst the borrowing of HFCs from NHB, the borrowings for rural housing sector registered a growth of about 323 per cent over the period 2007-10, whereas borrowings for urban housing sector registered a growth of only 54 per cent over the same period. XIX.4 Study on Affordable Housing and Housing Finance in the State of Rajasthan XIX.4.1 At NHB's initiative as an outcome of continuous dialogue with the State Government of Rajasthan (in line with the State Affordable Housing Policy 2009 with focus on EWS & LIG Housing through private participation), in partnership with IFC under the overall program of the World Bank FIRST initiative, it was agreed to undertake a study on the profile of affordable housing supply and demand in select cities and towns in the State of Rajasthan (after discussions with the State Government). These inputs were then to be taken for examining the possibility of establishing a specialized Housing Finance Institution in the private sector with focus on EWS & LIG segments. XIX.4.2 While the State Governments' initiative of the Housing Policy promotes the supply of affordable housing for the EWS/LIG segments with private participation, it was decided by the three partners namely NHB, Government of Rajasthan and IFC to match the housing supply with necessary intervention on the demand side for providing housing finance for the EWS/LIG segments. For the
145
XIX.4.3
XIX.4.4
XIX.4.5
XIX.5 XIX.5.1
purpose, it was decided to understand the demand for affordable housing and housing finance in the state of Rajasthan in India so as to establish a standalone HFC for financing 'affordable homes' in Rajasthan. In this regard IFC along with NHB held several discussions with Government of Rajasthan (GoR) and all three parties were of the view that a market assessment study on the demand for and supply of such units in the State needs to be undertaken to take strategic decisions on investing in a housing finance company focusing on affordable homes in the state. Accordingly, with financial assistance received from the World Bank under the FIRST initiative and through the NHB, the Business and Industrial Research Division (BIRD) of IMRB International was appointed for conducting the study to achieve the above objective. The Study report has brought out issues with regard to both Supply and demand side of the housing & housing finance sector in the State of Rajasthan. The Report also highlights the need for a HFC which would address the needs of this market segment comprising of household earning in the range of ` 8,000- ` 25,000 per month. The suggestions for the working of such an HFC in respect of its lending practices and terms & conditions are also useful as also the need for improving the Policy Environment in the State with specific reference to land availability & accessibility, infrastructure requirements etc. Further discussions are on with the State Government of Rajasthan together with IFC for setting up a State level Housing Finance Company with token participation from the State Government and substantive participation from other private sector entities. Study on Impact Assessment of Rural Housing Fund The Rural Housing Fund (RHF) was announced in the Union Budget 200809. To analyze the evaluation and
XIX.5.2
impact assessment of the scheme since its inception as also to look for possibility of expanding the potential of RHF, a study on Impact Assessment of Rural Housing Fund was conducted by the Bank during the year. The Study captured the essential parameters like the number of beneficiaries and their socio-economic profile, the geographical coverage of the scheme across the length and breadth of the country, performance assessment of the PLI's involved and NHB, the possibility of expanding the outreach or improving the delivery mechanism etc. The key findings of the Study are : Box VI Key Findings of the Study on Rural Housing Fund (RHF) Keeping in mind the severe housing shortage in the country, the inception of RHF Scheme is a step in the right direction. As far as institutional performance is concerned, the HFC's have dominated in terms of disbursements made under the Scheme. Disbursements made by PLI's (HFC's & RRB's) have witnessed an increase during the year 2009-10 over the year 2008-09. The role played by RRB's was small and the performance of Co-operative sector institutions was almost negligible. Hence, there is a strong need for expanding the role of Co-operative sector institutions under the Scheme. As far as regional performance is concerned, the Southern Zone has dominated in terms of disbursements. The performance of States like Andhra Pradesh and Tamil Nadu has been encouraging. Through a borrower profile analysis, it was determined that a significant part of the entire loan portfolio of the PLI's (over 91per cent) was for financing new construction activities. A majority of the borrowers of these PLI's were in the age bracket of 25-45. A majority of borrowers from these PLI's (over 63per cent) during the two years had an income range in the bracket of ` 0-2
146
XIX.6
XIX.6.1
lakh, which is an indication that the Scheme has the potential of reaching sections that deserve it the most. As per the Qualitative assessment, most PLIs have indicated that the branches in their home State have displayed the most encouraging results which could be due to the fact that PLIs usually have a strong presence in their home State or in the zone to which their home State belongs. PLI's have suggested various measures for increasing the outreach of the Scheme including some that are directed towards the Government/ NHB. PLI's have recommended that the Government and NHB could undertake appropriate publicity campaigns for popularizing the Scheme in the rural areas. Besides, builders/developers should be encouraged to set up low cost housing in rural areas for generating demand. PLI lending under the Scheme has also been hindered by the non-availability/difficulty in obtaining land records and the absence of clear/marketable titles. Hence, there is a need for the Government to take steps towards streamlining and computerizing land records. To conclude, the Rural Housing Fund Scheme, during its two years of operation, has displayed encouraging results. However steps need to be taken to expand its outreach and ensure its holistic developmental impact. The coverage of the Scheme has been uneven and there is a need for modifying the existing norms under the Scheme so as to make it more convenient to borrowers as well as PLI's. For a holistic development of the Scheme, there is a need for concerted efforts on the part of the authorities as well as PLI towards capacity-building measures and establishing linkages with institutions that have a strong presence in the rural sector. Study on the Impact Analysis of Housing Micro-Finance (HMF) Assistance to MFIs National Housing Bank (NHB) has been at the forefront of Housing Microfinance (HMF) initiatives by giving financial assistance to MFIs in various parts of the country. NHB has been gradually stepping up its
XX XX.1 XX.1.1
interventions in the informal sector as part of its promotional role in the context of EWS housing. The services provided by Community Based Financial Institutions (CBFIs) as financial and service intermediaries assume great significance. The Bank has recognised the penetration of these institutions as delivery mechanisms for channelizing housing finance to the unserved and the underserved at the local and decentralized level. Accordingly, NHB has developed suitable Housing Microfinance Programmes to cater to the needs of this section. The key findings of the Study have been enumerated earlier in the Report. Residential Real Estate Price Indices (NHB RESIDEX) Background NHB RESIDEX is an Initiative of the National Housing Bank to provide an Index of Residential Prices in India across cities and over time. NHB launched RESIDEX for tracking prices of residential properties in India, in July 2007, covering data upto 2005 with 2001 as the base year. The pilot study covered 5 cities viz. Bangalore, Bhopal, Delhi, Kolkata and Mumbai. As a pilot study, 5 cities were studied and thereafter NHB RESIDEX has been expanded to ten more cities viz., Ahmedabad, Faridabad, Chennai, Kochi, Hyderabad, Jaipur, Patna, Lucknow, Pune and Surat. NHB RESIDEX now covers 15 cities and has been updated upto March, 2011 (January March). NHB RESIDEX is now being updated on a quarterly basis with 2007 as the base year. Box VII Need, Scope and Coverage of NHB RESIDEX Need for NHB RESIDEX Movement in prices of real estate particularly residential housing is of vital importance to the macro economy as well as to various stakeholders including the lender, borrowers and all those who aspire to own a house. It has acquired added importance in the light of sustained increase in property
147
prices, in the recent past. Besides, the obvious wealth effect and its implications on macro economy, housing prices have emerged as good indicators of output, inflation, etc., which are useful inputs for developing regulatory and financial Policies. A broad representative housing price index serves as a useful indicator for macroeconomic analysis. NHB RESIDEX seeks to track the movement in prices of residential properties over a period of time by size and location of dwelling units. Granular information on movement of prices of residential properties (location wise, zone wise and city wise) are relevant indicators for various Policy formulations at the local and State level. The complex nature of markets for real estate is one of the major challenges towards construction of a representative price index for residential properties in India. With heterogeneous attributes in terms of qualitative and quantitative aspects like locality, covered area, community facilities, individual layouts, infrastructure, local demand and supply etc., captured in the RESIDEX, provides a widely representative Index based on a set of correlated factors. Scope and Coverage of the Index NHB RESIDEX tracks housing prices in the selected 15 cities and covers residential properties in different parts/locations of the cities. The Initiative, as it evolves, will seek to bring greater transparency in the property market. Uses of NHB RESIDEX The index will also aid home buyers in their decisions by enabling comparison between cities, between localities in the same city and comparison of a price rise in a particular city and localities over time. One of the major considerations in housing finance is the proper assessment of the value of property being financed. This information has a critical bearing on the credit evaluation and assessment of the quality of the security against the loan. NHB RESIDEX can be a useful indicator for estimating the value of
XX.2 XX.2.1
property to be financed and also assess the adequacy of security cover on the outstanding loan. Observers can also identify the potential markets from the movements of the NHB RESIDEX at the city level. Builders and developers may also benefit from the Index by assessing the demand scenario in a locality, and mapping the housing needs in different parts of the country. NHB RESIDEX may be useful to Policy makers, banks, housing finance companies, builders, developers, investors and individuals. NHB RESIDEX: Performance The movement in prices of residential properties has shown an upward trend in the 15 cities covered under NHB RESIDEX in July - September, 2010. Residential housing prices in 14 cities have shown an increasing trend in this quarter ended September, 2010 (JulySept, 2010) over the previous quarter ended June, 2010 (April-June, 2010). They are Patna (19per cent), Kochi (18per cent), Chennai (15per cent), Faridabad (12per cent), Lucknow (11per cent), Bhopal (9per cent), Kolkata (9per cent), Bengaluru (8per cent), Ahmedabad (8per cent), Hyderabad (7per cent), Pune (4per cent), Mumbai (4per cent), Delhi (4per cent) and Jaipur (3per cent). Patna (19per cent) has shown the maximum increase followed by Kochi (18per cent) and Chennai (15per cent) respectively. There is 1 (one) city, viz. Surat (-6per cent) which has shown correction in prices over the previous quarter. The movement in prices of residential properties has shown an upward trend in the 15 cities covered under NHB RESIDEX in October December, 2010. Residential housing prices in 13 cities have shown an increasing trend in this quarter ended December, 2010 (OctDec, 2010) over the previous quarter ended September, 2010 (July-Sept, 2010). They are Bengaluru (36per cent),
XX.2.2
148
Ahmedabad (16per cent), Kolkata (11per cent), Jaipur (10per cent), Delhi (8per cent), Bhopal (4per cent), Mumbai (4per cent), Faridabad (3per cent), Kochi (3per cent), Lucknow (3per cent), Surat (3per cent), Chennai (2per cent) and Pune (1per cent). Bengaluru (36per cent) has shown the maximum increase followed by Ahmedabad (16per cent) and Kolkata (11per cent) respectively. There are 2 cities which have shown correction in prices over the previous quarter and they are Hyderabad (-1per cent) and Patna (-1per cent). Prices have nearly been the same in 3 cities showing +/1per cent change in prices and they are Pune (1per cent), Hyderabad (-1per cent) and Patna (-1per cent). XX.2.3 The movement in prices of residential properties has shown mixed trend in the 15 cities covered under NHB RESIDEX in January - March, 2011 quarter. Residential housing prices in 3 cities have shown an increasing trend
in this quarter ended March, 2011 (JanMar, 2011) over the previous quarter ended December, 2010 (Oct - Dec, 2010). These cities are Pune (5.02per cent), Lucknow (3.09per cent) and Delhi (2.64per cent). The city which has shown the maximum increase is Pune (5.02per cent) followed by Lucknow (3.09per cent) and Delhi (2.64per cent) respectively. There are 7 cities which have shown correction in prices over the previous quarter and they are Bengaluru (- 17.6per cent), Kochi (14.92per cent), Faridabad (- 6.37per cent), Hyderabad (- 4.6per cent), Surat (- 3.76per cent), Bhopal (- 3.55per cent) and Jaipur (- 2.63per cent). Prices have nearly been the same in 5 cities showing +/- 1per cent change in prices and they are Kolkata (- 0.77per cent), Ahmedabad (0.4per cent), Chennai (1.66per cent), Mumbai (1.39per cent) and Patna.
Table VII: NHB Residex-Percentage (per cent) change in different cities: City-wise growth rate over the previous quarter
Cities
Hyderabad Faridabad Patna Ahmedabad Chennai Jaipur Lucknow Pune Surat Kochi Bhopal Kolkata Mumbai Bengaluru Delhi July September quarter over April June quarter 6.51 11.58 19.23 7.71 14.66 3.40 11.35 3.61 -5.67 18.04 8.96 8.67 4.33 8.46 4.22 October December quarter over September quarter -0.64 3.49 -1.15 16.47 2.18 9.60 2.70 1.31 3.36 3.27 4.30 11.24 3.59 35.78 7.70 January March quarter over October December quarter -4.60 -6.37 0.00 0.40 1.66 -2.63 3.09 5.02 -3.76 -14.92 -3.55 -0.77 1.39 -17.60 2.64
149
Table VIII: NHB Residex: City-wise Housing Price Index (Base Year: 2007 = 100)
Cities 2007 Index 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Jan-June Jan-June July- Dec Jan-June July-Dec Jan-Mar Apr-Jun Oct-Dec Jan-Mar 2008 Index 2008 Index 2008 Index 2009 Index 2009 Index 2010 Index 2010 Index 2010 Index 2011 Index 96 100 103 106 104 119 103 101 101 106 139 114 112 73 124 92 121 100 100 95 115 102 97 98 95 151 140 117 76 130 65 139 107 127 120 71 104 103 111 90 139 162 124 58 121 81 145 119 128 143 63 119 117 123 83 162 185 126 59 113 81 154 127 113 164 66 112 124 109 79 158 165 134 64 106 82 152 124 131 183 61 133 135 136 83 153 176 160 68 110 87 170 148 141 210 63 148 140 128 97 166 191 167 74 115 87 176 146 164 214 69 152 141 133 101 173 213 173 101 123 83 165 146 165 218 67 157 148 128 86 167 211 175 88 126
Hyderabad Faridabad Patna Ahmedabad Chennai Jaipur Lucknow Pune Surat Kochi Bhopal Kolkata Mumbai Bengaluru Delhi
Chart VI: NHB Residex: City-wise Housing Price Index
CITY -WISE HOUSING PRICE INDEX
150
XXI XXI.1 XXI.1.1
Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) Background The Government of India approved the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) on December 26, 2008. The Ministry of Housing & Urban Poverty Alleviation (MHUPA) finalised the operative guidelines for implementation of the Scheme and the Scheme became operational thereafter. The Scheme is expected to leverage flow of institutional finance for the EWS and LIG segment households and also intends to create an additional housing stock of 3.10 lakh houses for these segments over the next four years (2008-12). An allocation of ` 1, 100 crore has been provided for this Scheme. The Scheme will be in operation till 2012. The loan repayment periods generally permissible range from 15-20 years. The interest subsidy at 5 per cent per annum for EWS and LIG segments would be admissible for loan upto ` 1 lakh over the full period of the loan. The Scheme is being implemented through Banks and select Housing Finance Companies. NHB and HUDCO are the Central Nodal Agencies for the administration of interest subsidy and monitoring the progress under the Scheme. Subsequent Developments NHB as a Central Nodal Agency has signed Memorandum of Understanding (MoU) with 33 primary lending institutions (PLIs) consisting of 20 Public Sector Banks, 2 Private Sector Banks, 5 Regional Rural Banks and 6 Housing Finance companies. NHB has signed MoU with State Bank of India, Oriental Bank of Commerce, United Commercial Bank, Corporation Bank, Indian Bank, Punjab & Sind
XXI.1.2
Bank, Syndicate Bank, Punjab National Bank, Central Bank of India, Union Bank of India, Bank of Baroda, Allahabad Bank, State Bank of Mysore, Andhra Bank, Canara Bank, State Bank of Hyderabad, United Bank of India, Indian Overseas Bank, Bank of India and IDBI Bank Ltd. among the Public Sector Banks and ICICI Bank and Axis Bank among Private Sector Banks and Uttar Bihar Gramin Bank (CBI),Karnataka Vikas Grameen Bank (Syndicate Bank), Pragathi Gramin Bank (Canara Bank), Uttarbanga Kshetriya Gramin Bank (CBI), Cauvery Kalpatharu Grameena Bank (SBM) and Housing Development Finance Corporation Ltd (HDFC Ltd.), Housing & Urban Development Corporation Ltd (HUDCO), Dewan Housing Finance Corporation Ltd.(DHFL), LIC Housing Finance Ltd., Can Fin Homes Ltd., and DHFL Vysya Housing Finance Ltd., amongst the Housing Finance Companies. XXI.2.2 At the behest of MHUPA, NHB organised a review meeting on December 16, 2010 with select SLBC Convenors and officials from Banks / HFCs for discussing the various modalities in the implementation and for suggesting the alternate measures which could address the issues relating to the implementation. Till June 30, 2011, NHB received 190 interest subsidy claims from PLIs claiming `5.11 crore as Net Present Value (NPV) of interest subsidy covering 6201 beneficiaries, of which, 168 claims amounting to `4.32 crore were sanctioned / disbursed by NHB to various PLIs towards 5662 beneficiaries. 1per cent Interest Subvention Scheme In order to stimulate demand for credit for housing in the lower & middle
XXI.2 XXI.2.1
XXI.2.3
XXII XXII.1
151
income segment of population in the country Government of India introduced interest subvention of 1% for one year on all individual housing loans upto `10 lakh, provided the cost of the unit does not exceed `20 lakh from 1st October, 2009 to 30th September, 2010. Further in the budget for FY 2010-11 the Scheme was extended up to March 31, 2011. Scheme was further extended for FY 2011-12 with increase in limit of housing loans upto `15 lakh and cost of house upto `25 lakh from `10 lakh & `20 lakh respectively in earlier years. The Scheme recognizes that cut in interest rates has an important role to play in reducing EMIs of borrowers & creating additional demand for housing. All regions of the States & Union Territories in the country, including rural & urban areas will be covered under the Scheme. The Reserve Bank of India (RBI) and National Housing Bank (NHB) are the nodal agencies for Scheduled Commercial Banks and Housing Finance Companies (HFCs), respectively. The Scheme is being implemented through 24 HFCs registered with NHB as central nodal agency. As on 30th June, 2011 NHB has received claims totaling to ` 55.74 crore from 20 HFCs out of which claims totaling to ` 17.32 crore has been released by Government to NHB and the same has been disbursed to HFCs. XXIII XXIII.1 Corporate Governance The Bank is committed to follow the best practices on corporate governance and has emphasised on the cardinal values of fairness, transparency and accountability for performance at all levels in dealing with its stakeholders. Towards this end, to ensure that the right information is accessible to right
people at right time, records of the meetings of the Board and other Directors' Committee have been digitized and updated regularly. Further, the compliance with all the statutory requirements is ensured by the Bank. XXIII.2 The endeavour of the Bank is to provide up-to-date status to its stakeholders through its dynamic website with easier and speedier access and downloads. The Bank's website contains all the information about its activities/functions, products, new initiatives, organization, etc. Various information on Bank's Financial Support, Information for Housing Finance Companies (HFCs) and their depositors, Research & Development Reports, Publications, etc. are also available at the website for Housing Finance Institutions and public at large. Downloadable, include applications forms (i) for companies desirous to register with Bank and/or seek financial support equity or finance for their operations, (ii) for investors desirous to invest in Bank's deposit schemes, etc. Composition of the Board and its Committees The general superintendence, direction and management of the affairs of the business of the Bank are vested in the Board of Directors, which acts on business principles with due regard to public interest. The Board of Directors has been constituted in accordance with the provisions of the National Housing Bank Act, 1987 (Central Act No. 53 of 1987). The Board is headed by the Chairman and Managing Director, who is appointed under Section 6 (1) (a) of the Act; with eleven other Directors appointed or nominated as per the provisions of Section 6 (1) (b) to (f) of
XXIII.3 XXIII.3.1
152
the Act. The composition of eleven Directors includes four Independent Directors, two nominated by Reserve Bank of India, three amongst the officials of the Central Government, and two amongst the officials of the State Government. XXIII.3.2 The Board has constituted three Committees, viz., (a) Executive Committee of Directors [EC], (b) Audit Committee of the Board [ACB] and (c) Remuneration Committee of Directors [RC] to enable better and focused attention on the affairs of the Bank. The functions of the EC, ACB and RC are well-defined and the Board has delegated certain powers to these Committees. The Board/Committee meetings are held at regular intervals. XXIII.3.3 During the year 2010-11, the Board, the Executive Committee of the Board and Audit Committee of the Board each met six times. The following changes have taken place in the Board of Directors of the Bank: i. Shri R. V. Verma, Chairman & Managing Director, National Housing Bank with effect from 1509-2010 in place of Shri S. Sridhar;
Smt. Nilam Sawhney, IAS and Shri Ashok Dongre, IAS. XXIII.4 Annual Financial Inspection for the Year ended June 2010 The Reserve bank of India (RBI) conducted the Annual Financial inspection of the Bank under Section 45 N of the RBI Act 1934 with reference to its position as on June 30, 2010. The compliance has been submitted to the RBI after getting the same approved by the Audit Committee of Board. XXIII.5 XXIII.5.1 Auditors Statutory Audit The accounts of the Bank for the financial year 2010-11 were audited by M/s. Aiyar and Co., Chartered Accountants, New Delhi who were appointed as the Statutory Auditors of the Bank for the year 2010-11 by the Reserve Bank of India. The report of the Auditors is given in the Annual Accounts section of this Report. XXIII.5.2 Internal and Concurrent Audit The Internal Audit functions of the Bank for the year 2010-11 were outsourced to a firm of Chartered Accountants, M/s S. P. Chopra and Co., New Delhi. Concurrent Audit of Treasury Operations and day-to-day operations of accounts were also outsourced to a reputed firm of Chartered Accountants, M/s K. S. Kohli, New Delhi. XXIV XXIV.1 XXIV.1.1 Human Resources Staff Strength & Recruitment and Promotions The total staff strength of the Bank, as on 30th June, 2011, stood at 87 including CMD and 5 Management Trainees as against 89 at the close of previous year. The Bank has recruited 5 Management Trainees (in Scale I) from
XXIII.3.4
ii. Shri Sanjay Kumar Rakesh, IAS, Joint Secretary to Government of India, Ministry of Rural Development with effect from 2209-2010 in place of Smt. Nilam Sawhney, IAS; and iii. Shri K. Phanindra Reddy, IAS, Secretary to Government of Tamil Nadu, Housing & Urban Development Department with effect from 21-05-2011 in place of Shri Ashok Dongre, IAS. XXIII.3.5 The Board placed on record its deep appreciation to the valuable contributions made by Shri S. Sridhar,
153
ICWAI. Besides this, 6 officers including 2 Advisors are also engaged in the Bank's service on contract basis. During the year, 7 officers were relieved from the services of the Bank which includes 1 Assistant Manager, 3 Deputy Managers, 1 Manager, 1 Assistant General Manager and 1
CBI Academy, FICCI, ASSOCHAM, AIMA, Dun & Bradstreet etc. XXIV.2.2 An in-house training programme on Enhancing Managerial Effectiveness was conducted on 29-30 April, 2011 at NHB, New Delhi. To address the Programme, faculty members from IILM Institute of Higher Education, Gurgaon were invited. In all, a total of 36 officers attended the programme. Business Review Conference for officers of the Bank
XXIV.3
Shri R.V. Verma, CMD addressing the participants at Wharton School
General Manager on account of voluntary retirement /resignation. During this period 4 officers in RM/Scale IV were promoted to AGM/Scale V, 5 officers in Mgr/Scale III were promoted to RM/Scale IV and 3 officers in DM/Scale II were promoted to Mgr/Scale III. XXIV.2 Training XXIV.2.1 To upgrade skills and enhance proficiency, the Bank deputed its officers to various training and management development programmes besides organizing inhouse programmes. During the year, 90 officers attended various training programmes. This includes 10 officers who attended international programmes and 80 officers attended national level programmes from senior to middle management and below. The officers were nominated to programmes at national level institutes such as National Institute of Bank Management (NIBM), Indian Institute of Management (IIM), Indian Banks Association (IBA), XLRI Jamshedpur College of Agricultural Banking (CAB),
XXIV.3.1 A Budget-cum-Business Review Conference of Senior Officers was held on November 27, 2010 at India International Centre. All officers in the level of RM and above, including RMs posted in ROs attended the Conference. XXIV.3.2 Budget-cum-Business Review Conference for Officers of Junior & Middle Management (including MTs) was held on 24-25 June, 2011 at TERI Retreat, Gurgaon. All the officers in the level of AM, DM, MGRs & MTs, including those posted in ROs attended the Conference. XXIV.4 Mentor Scheme XXIV.4.1 The Bank has introduced a Mentor Scheme to help the new officers fit well into the Bank by quickly developing a good understanding of its functioning, vision & goals. The Scheme has now been extended to the Management Trainees on the same lines as it was applicable to the officers in Scale I & Scale II. XXV XXV.1 Rajbhasha National Housing Bank is always committed towards the successful and effective implementation of official language policy of the Government of India and has implemented relevant and effective measures for the progressive use of Hindi language in
154
Dr. D. Subbarao, Governor, Reserve Bank of India handing over Rajbhasha Prize to Shri R.V. Verma, CMD, NHB on June 1, 2011
work. The regular (once in a quarter) meetings are held by the Intradepartmental Official Language Implementation Committee in which the analysis of the progressive use of the official language in Head Office along with the regional office at Mumbai and in all other representative offices is monitored. XXV.6 During the year, an officer of the Regional Implementation Office of the Department of Official Language, Ministry of Home Affairs visited Head Office of the Bank for inspection and analysing the progressive use of Hindi. The Official Language Inspector appreciated work of Hindi in the Bank. The website of the Bank has been provided in Unicode Font as per the directions of the Official Language Department of the Ministry of Home Affairs. Delhi Nagar Rajbhasha Karyanvyan Samiti (Official Language Implementation Committee of Delhi City) has started a joint website along with all the member of banks in which National Housing Bank also holds a Web Page. Various activities of the Bank have been displayed therein. The write-ups of Bank's officers are also published in the Hindi magazine named, "Bank Bharti" published by the Delhi Nagar Rajbhasha Karyanvyan Samiti. The quarterly Hindi in-house magazine ""Awas Bharti"" has also been enriched in its content as also in presentation. The magazine has received Third Prize for the Year 200910 from Delhi Bank Nagar Rajbhasha Karyanvyan Samiti. Along with this, the Bank's magazine has received Fourth Prize in the Year 2007-08, 200809 & 2009-10 in the Rahbhasha Griha Patrika (Official Language Domestic Magazine) competition organized by
the Bank. XXV.2 Bank complies with the provisions of monitoring work relating to issuing replies in Hindi for the Hindi/ bilingual letters received from Government of India, issuance of the bi-lingual documents under Section (3), publishing reports and Bank's publications in bi-lingual etc. Workshops are also organized regularly to enhance the usage of Hindi. 'Aaj ka Shabd' (Today's word) is written in Hindi/English at the Notice Board of the Bank which is also sent through internal e-mail to all the Officers of the Bank. 'Hindi Chetna Maas' is celebrated to promote the use of Hindi in routine work of the Bank. Seven competitions were organised the year 2010-11 during the Chetna Maas held from August 15, 2010 to September 14, 2010 in which a large number of Bank's officers participated with great zeal. During Chetna Maas, Hindi Documentary film 'Pipli Live' was shown. To encourage use of Hindi within the Bank, the Bank introduced a quarterly Hindi competition on various aspects viz writing/reading etc. Three prizes are given under each competition to the winners. Various encouragement plans have been started from time-to-time to promote the use of Hindi in official
XXV.7
XXV.3
XXV.8
XXV.9
XXV.4
XXV.5
155
the Reserve Bank of India at All India level. XXVI. XXVI.1 Knowledge Centre In a time when knowledge has become the key economic resource and the dominant and perhaps even the only source of comparative advantage, the Knowledge Centre is acting as the main learning resource centre of the Bank by providing current and updated information to all its officers and enabling them to perform their day to day task of decision making. The core collection of Knowledge Centre contains subjects such as architecture, housing, economics, banking, fiction, literature, poetry etc in printed and non printed form along with 50 foreign and Indian print/ejournals related to finance, housing, economics, management and other technical/ non technical subjects. All the functions of knowledge centre are managed through library automation software LIBSYS, thus making it a fully automated library. The tools which are used by Knowledge Centre for classification of printed and non printed material are 22nd edition of Dewey decimal classification, Library of Congress subject heading list and Cutter's author table. Knowledge Centre has extended membership of some leading libraries such as American Information Centre and British Council Library to officers. Awards and Recognitions SKOCH Award for Financial Inclusion 2011 for role in Rural Housing
Housing Finance Scheme, a market based Scheme and Rural Housing
NHB conferred Financial Inclusion Award for Rural Housing Finance, January 05, 2011
XXVI.2
Fund, a subsidy based Scheme for the weaker sections have expanded the scope of rural housing credit in the country and have resulted in improved institutional depth in providing housing credit delivery in rural areas. They have demonstrated the viability and sustainability of rural housing finance and in a more tangible manner have resulted in construction and improvement of rural housing stock. XXVII.1.2 The award was presented by Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India in the presence of Dr. C. Rangarajan, Chairman, Prime Minister's Economic Advisory Council and other distinguished guests to Shri R. V. Verma, CMD, NHB and his team during the Financial Inclusion Day Celebrations held on January 5, 2011 at New Delhi. The Award ceremony was preceded by a Banker's Conclave on Financial Inclusion wherein Shri R.V. Verma highlighted the synergy between inclusionary housing and financial inclusion besides stressing NHB's renewed emphasis on low & moderate income and rural housing. XXVII.2 ADFIAP Award for Development Finance-led Poverty Alleviation 2011 for Rural Housing Finance
XXVII. XXVII.1
XXVII.1.1 The SKOCH award for Financial Inclusion 2011 was conferred on National Housing Bank for rural housing. The two dedicated Schemes of NHB viz. Golden Jubilee Rural
XXVII.2.1 The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) award for the year
156
2011 was conferred on NHB under the category Development Finance-led Poverty Alleviation. The award was given to NHB for its role in Rural Housing Finance through its two successful schemes viz. Golden Jubilee Rural Housing Finance Scheme and Rural Housing Fund. XXVIII XXVIII.1 Future Outlook The housing sector in India historically had significant gaps in terms of credit flow and market infrastructure. The market reforms and liberalization through the 1990's contributed substantially to the productivity and efficiency of this sector in terms of credit flow and its absorption in the market. The supply responses, however have not been so smooth, and responsive to the growth in demand. While the demand has grown through increased supply of credit, the supplyside rigidities have limited the scope and efficacy of funding. As a result, smooth integration of the financial market with the real economy was a challenge when the reforms began. Experience over the last decade or so has been very encouraging and the investments in housing have registered a compounded annual growth rate (CAGR) of nearly 28-30%, despite recession in different segments of the economy from time to time. The commercial banks who are now the major players in the financial market, have stepped up their housing loan advances significantly over the years achieving an annual growth of nearly 25%. The growth in their housing loan portfolios is largely demand-driven. Similarly, the specialized Housing Finance Companies (HFCs) also continue to be significant players in this market. They have also
experienced similar expansion in their housing loan business. A supportive tax regime by way of fiscal incentives and an enabling regulatory (financial sector) framework until about 2006-07 has led to sustained increase in demand for housing loans. The borrowers of housing loans have definite preferences for tax savings for housing loan repayments,(principal and interest) which are provided under the existing taxation laws. For the lending agencies, the banks and the housing finance companies, tax shelters can be a huge incentive for their continued expansion in their lending for housing.The regulatory regime governing the housing finance business has ensured stability and sustainability of the system and its growing depth. XXVIII.3 Rental housing policy at the State level will need to be placed on the larger urban policy agenda. An enabling rental housing Policy at the State level and its implementation will also go a long way in addressing the housing problem of the migrant population. Little work has been done in this field, which has huge potential to improve the housing supply scenario. While the future growth outlook of the housing market looks promising, as the sector will become increasingly demand driven, the challenge lies in making it more inclusive. The urbanization scenario can easily begin to look daunting and will need proactive intervention. By 2030 it is estimated that 600 million of India's population will be living in India's cities. Infrastructure gaps in cities particularly in respect of sanitation and housing are serious challenges that will need to be addressed through appropriate, pro-active and actionable
XXVIII.2
XXVIII.4
157
Policies through supply-side intervention. XXVIII.5 Factors such as rapid increase in land prices, inadequate infrastructure, absence of long-term debt market and long-term loans for borrowers at reasonable fixed rates, limited developer finance and lack of access to housing finance for low-income rural and informal group borrowers are some of the constraints for affordable housing on the demand side. The markets need balanced funding models and a diversified toolbox to cater to the different market segments. Risk mitigation in financing individuals as also in financing the projects undertaken by developers /builders (particularly for low and moderate income housing) will need to be explored through special purpose entities, and through incentive-based approach. Sound and prudential regulations for housing finance, innovative housing finance products, and increased mortgage affordability will contribute to an expanded market for housing and housing finance. With rapid growth witnessed in the primary mortgage markets over the last 4-5 years, the development and growth of the secondary mortgage market has become imminent and NHB expects to play a lead role in this initiative. Financial inclusion of the excluded (largely poor and low-income groups) has been identified by policymakers, and development organizations as an important pillar to achieve the Millennium Development Goals (MDGs) of reducing poverty and improving livelihoods. Participation in formal financial sector is seen as crucial for the poor to build savings XXVIII.8
and assets, and break the vicious cycle of poverty. Micro-mortgages, with loan size ranging from ` 3-10 lakh and targeted at low-income customers, can act as an important vehicle for advancing financial inclusion, one that is based on customer needs and operates through the regulated financial market. Potentially, Micromortgage lending and construction industry could play a transformative role in promoting the financial inclusion of millions of lowincome households. In order to promote financial sector participation in low income housing market, initiatives for bankable schemes are being explored, though the lenders and the regulators alike are adopting a cautious approach. Risk mitigating instruments can play an important role in overall confidence-building. These may range from savings-linked loans, mortgage guarantee, governmentguaranteed funds, capital/interest subsidy product, credit information bureaus, micro-mortgage lending linked to financial inclusion, Government-sponsored credit enhancement etc. As his segment continues to grow, they need to be served through measures of financial inclusion and inclusionary housing. However, they will need to be protected/hedged against the inbuilt uncertainties and volatilities in the financial and the housing market. On the supply side, incentive-based construction by the private sector and/or suitable public-private partnership vehicle with riskmitigation provisions will need to be explored and supported. The low income market can be served efficiently and sustainably, through the combined support of the financial
XXVIII.6
XXVIII.7
XXVIII.9
158
sector institutions and the real sector policy makers dealing with land and infrastructure, tax, stamp duty and subsidies, approvals etc. . The central government through the Ministry of Housing and Urban Poverty alleviation and the state governments, togetherwith their private sector
counterparts are getting increasingly engaged on the issues related to housing for the low income people. With the weaknesses in the system well recognized, all the stakeholders in the financial and the real sector - will need to jointly advance the cause of affordable housing.
*****
Farewell to Ms Shyamala Gopinath, Deputy Governor, Reserve Bank of India
159

ANNUAL ACCOUNTS 2010-11 (JULY, 2010 TO JUNE, 2011)
AIYAR & CO.

CHARTERED ACCOUNTANTS
607, AKASH DEEP 26-A, BARAKHAMBA ROAD
NEW DEHI - 110 001 PHONE :23313807,23316117 23316125, FAX : 23310281 e-mail : infor@aiyarco.com aiyarco@eth.net We further report that 1. We are unable to form an opinion on the treatment given by the Bank in respect of the following matters and the impact that the same may have on the accounts of the Bank as the final decisions have yet to be delivered by the Courts and the sums determined. `237.06 Crores received from State Bank of Saurashtra, since amalgamated with State Bank of India pursuant to a decree by the Special Court and others and included in 'Other Liabilities'[Note No.18.1]. `149.37 Crores appearing as 'Other Assets' representing `95.40 Crores paid by the Bank to State Bank of Saurashtra since amalgamated with State Bank of India and `53.97 Crores paid by the Bank to Custodians pursuant to the orders of the Special Court [Note No.18.2]. Provision in the accounts has not been made for the disputed Income Tax Liability for the assessment year 2003-04 to 2008-09 amounting to `66.75 Crores arising from reassessment of earlier years completed during the year (refer note 21.3), disallowing the deduction claimed by the bank in respect of special reserve created and maintained under section 36(1) (viii) of the Income Tax Act, 1961. Based on the legal opinion obtained, the management is of the view that the claim of the Bank under section 36(1)(viii) of the Income Tax for which appeals are pending before authorities may be decided in Bank's favour and the deduction shall be allowed. On the said assumption Bank has created deferred tax liability (DTL) of `66.75 Crores, considering the timing difference, instead of provision for income tax. In our opinion till the appeals are decided in favour of the bank regarding deduction of special reserve under sections 36(1) (viii), no timing differences arise on the said account as
We have audited the attached Balance Sheet of National Housing Bank as at 30th June, 2011 and the Profit and Loss Account annexed thereto for the year ended on that date. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report as follows: a) The Balance Sheet and Profit and Loss Account have been drawn up in accordance with the National Housing Bank Act, 1987 and regulations framed there under for General Fund and for Special Fund in accordance with the provisions of National Housing Bank (Slum Improvement and Low Cost Housing Fund) Regulations, 1993. In our opinion, proper books of account as required by law have been kept by the Bank so far as appear from our examinations of those books. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with books of account. Where we have called for information and explanations, such information and explanations have been given to us and we have found them to be satisfactory.
162
a)
b)
2.
b)
c)
d)
per Accounting Policy of the Bank and as envisaged by Accounting Standards 22Accounting for taxes on Income issued by The Institute of Chartered Accountants of India on the reporting date since the accounting income and taxable income as determined and computed by the revenue for the above assessment years for arriving at the taxable income, the deduction claimed for special reserve has not been allowed and as such as at the reporting date is not capable of reversal in subsequent periods. This has resulted in deferred tax liability being overstated to the extent of `66.75 Crores with consequent effect on carrying amount of advance tax / provision for tax. However the same has no effect on the profit of the Bank. 3. In regard to provision for taxation the bank during the year reviewed it policy on provision for taxation and has uniformly provided deferred tax liability (DTL) in regard to the special reserve under section 36(1)(viii) of the Income Tax Act, as against earlier years practice of creating DTL in some of the year and in other providing for the tax liability. However, for the assessment year 2009-10 both income tax and DTL have been created in respect of special reserve under section 36(1)(viii) of the Income Tax Act, resulting in the profit for year being under stated to the extent of `3.83 Crores (refer note 21.4) with consequent effect on carrying amounts of advance tax / provision for tax and the reserves in the Balance sheets. In compliance with Accounting Standard
11 - The Effects of Changes in Foreign Exchange Rate issued by The Institute of Chartered Accountants of India, the Bank as on the reporting date has revalued its Foreign Exchange borrowings from USAID and interest payable there on. This has resulted in increase in liability to the extent of `31.14 Crores with consequent effect on amount recoverable from Government of India (GOI). The said re-valuation has no effect on the profit of the Bank, (Refer par 14.1). 5. Further subject to our comments in para 1 to 4 above, in our opinion and to the best of our information and according to the explanations given to us and as shown by the books of the Bank the said accounts read together with the notes thereon, give the information required by the National Housing Bank Act, 1987 and regulations framed there under for General Fund and for Special Fund in accordance with the provisions of National Housing Bank (Slum Improvement and Low Cost Housing Fund) Regulations, 1993 in the manner so required and in conformity with the accounting principles general accepted in India, in the case of: The Balance Sheet of the Bank read together with notes thereon & Significant Accounting policies, is a full fair Balance Sheet containing all the necessary particulars and is properly drawn up so as to exhibit a true and fair view of the affairs of the Bank as at 30th June 2011; and The Profit and Loss Account read together with notes thereon & Significant Accounting Policies shows a true balance of profit of the Bank for the year ended on that date.
i)
ii)
4.
For AIYAR & CO. Chartered Accountants Firm Regn. No.001174N
Place: New Delhi Date: 6 Sep 2011

163
C.CHUTTANI Partner Membership No.090723

Previous Year ` in Crore 450.00 2,072.41 0.00 8,351.81 4,375.75 6,457.21 82.30 667.15 272.49 2.79 22,731.91 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Liabilities Capital Reserves Profit and Loss Account Bonds and Debentures Deposits Borrowings Deferred Tax Liability (net) Current Liabilities and Provisions Other Liabilities HLA deposits with banks and HFCs - as per contra TOTAL
Balance Sheet
Schedules I II III IV V VI VII VIII Current Year ` in Crore 450.00 2,351.72 0.00 9,766.86 6,026.81 6,058.34 91.79 760.68 272.49 2.07 25,780.76
K. N. Kumbhare Regional Manager
R.K. Pandey General Manager
Arnab Roy Executive Director
R.V. Verma Chairman & Managing Director
Directors
Vidyadhar K. Pathak Errol D'Souza Jayshree A. Vyas H.R. Khan
Lakshmi Chand
Arun Kumar Misra
Alok Nigam
Sanjay K. Rakesh
New Delhi, September 6, 2011

164 8
as at 30th June, 2011

Previous Year ` in Crore 1,789.02 858.15 19,836.66 19.41 225.88 2.79 1. 2. 3. 4. 5. 6. Assets Cash and Bank Balances Investments Loans and Advances Fixed Assets Other Assets HLA deposits with banks and HFCs - as per contra Schedules IX X XI XII XIII Current Year ` in Crore 2,117.60 764.61 22,581.45 20.31 294.72 2.07
22,731.91
TOTAL
25,780.76
78.88
Contingent Liability Notes forming part of Accounts
XIV XV
130.52
As per our attached Report of even date For Aiyar & Co. Chartered Accountants Firm Regn. No. 001174N
(C. Chuttani) Partner Membership No. 90723
165

Previous Year ` in Crore 1,051.68 8.67 0.15 0.08 1.74 0.37 1.82 0.47 0.26 2.20 16.61 6.32 0.97 7.47 0.00 0.31 7.51 1.92 0.00 0.00 22.00 0.07 5.79 0.00 136.00 280.25 1,552.66 6.59 26.00 2.80 235.13 9.73 280.25 K. N. Kumbhare Regional Manager Vidyadhar K. Pathak Lakshmi Chand 1. 2. 3. 4. 5. 6. 7. 8. Expenditure
Profit & Loss Account

Current Year `in Crore 1,489.50 7.32 0.09 0.11 1.69 0.33 0.08
Interest on Borrowings and Deposits Staff Salaries, Allowances and Terminal Benefits Directors' and Committee Members Fees and Expenses Audit Fees Rent, Taxes, Electricity and Insurance Postage, Telegrams, Telex and Telephones Law Charges Printing, Stationery and Advertisement (i) Printing and Stationery 0.34 (ii) Advertisement 0.41 9. Depreciation 10. Brokerage, Guarantee Fee and Other Expenditure on Borrowings 11. Stamp duty on Borrowings 12. Travelling Expenses 13. Other Expenditure 14. Write offs 15. Amortization on Investment 16. Loss on Shifting of Securities 17. Loss on Revaluation of Foreign Deposits and Borrowings 18. Provision for Diminution in the Fair Value of Restructured Accounts 19. Provision for Standard Assets 20. Provision for Bad and Doubtful Debts u/s 36(1)(viia)(c) of Income Tax Act,1961 21. Wealth Tax 22. Deferred Tax 23. Income Tax-Earlier Years 24. Income Tax-Current Year 25. Balance of Profit carried down TOTAL 26. Transfer to Investment Fluctuation Reserve 27. Transfer to Special Reserve in terms of Section 36(1)(viii) of Income Tax Act, 1961 28. Transfer to Staff Benevolent Fund 29. Transfer to Reserve Fund 30. Balance Carried to Balance Sheet TOTAL R.K. Pandey General Manager Errol D'Souza Arun Kumar Misra Arnab Roy Executive Director
0.75 2.76 3.09 3.11 1.30 7.45 0.14 0.41 0.00 2.04 0.09 9.50 20.50 0.13 9.49 69.88 129.00 278.93 2,037.69 0.00 22.00 0.64 245.81 17.92 286.37
R.V. Verma Chairman & Managing Director H.R. Khan Sanjay K. Rakesh
Directors
Jayshree A. Vyas Alok Nigam
166
for the year ended 30th June, 2011

Previous Year ` in Crore Income 1. Interest on Loans and Advances and Bank Deposits: 1,338.20 105.87 32.35 31.88 1.89 9.11 0.51 0.01 22.89 2.20 0.98 6.77 0.00 (i) Loans and Advances (ii) Bank Deposits 2. Interest Income and Profit on Interest Rate Swaps 3. Income from Investments 4. Profit on Sale of Investments 5. Profit on Purchase and Sale of Mutual Fund 6. Premium on Forward Exchange Contract 7. Profit on sale of Fixed Assets 8. Other Income 9. Gains/(Loss) on revaluation of Forward Exchange Contracts 10. Provisions no longer required written back 11. Provisions and Contingencies (excess provision on investment reversed) 12. Excess provision for Income Tax of earlier years written back 1,770.31 108.18 1,878.49 21.06 38.46 0.00 5.93 0.83 0.06 2.98 1.61 0.04 0.00 88.23 Current Year ` in Crore
1,552.66 280.25 0.00
TOTAL 13. Balance of Profit brought down 14. Transfer from Taxation Reserve
2,037.69 278.93 7.44
280.25
TOTAL
286.37
As per our attached Report of even date For Aiyar & Co. Chartered Accountants Firm Regn. No. 001174N (C. Chuttani) Partner Membership No. 90723
167
Schedules to the Balance Sheet as at 30th June, 2011

Previous Year ` in Crore SCHEDULE - I CAPITAL 450.00 1. Authorized 450.00 2. Issued and Paid-up (wholly subscribed by the Reserve Bank of India) 450.00 TOTAL 450.00 450.00 450.00 Schedules
Schedule - II Reserves
( ` in Crore)
Description 1. Reserve Fund 2. Special Fund (Slum Improvement & Low Cost Housing Fund) 3. Special Reserve in terms of Section 36(1)(viii) of Income Tax Act, 1961 4. Investment Fluctuation Reserve 5. Taxation Reserve 6. Staff Benevolent Fund TOTAL
Opening Balance 1,453.00 266.45 318.40 20.08 7.45 7.03 2,072.41
Additions 245.81 17.92 22.00 0.00 0.00 1.14# 286.87
Deductions 0.00 0.00 0.00 0.00 7.45 0.11 7.56
Closing Balance 1,698.81 284.37 340.40 20.08 0.00 8.06 2,351.72
# inclusive of interest earned on bank deposits of ` 0.50 Crore
168

Previous Year ` in Crore Schedules SCHEDULE - III PROFIT & LOSS ACCOUNT Balance as per Profit and Loss Account Less: Profit of Special Fund (Slum Improvement and Low Cost Housing Fund) transferred to Special Fund A/c Current Year ` in Crore
9.73
17.92
9.73 0.00
17.92
0.00 0.00
168.00 1,050.00 510.72 6,410.00 205.00 442.00 431.90 155.63 8,351.81
1. 2. 3. 4.
5.
SCHEDULE - IV BONDS AND DEBENTURES Bonds (Guaranteed by GOI) Zero Coupon Bonds 1,850.00 Less: Deferred Discount on Zero Coupon Bonds 565.46 NHB Bonds Priority Sector Bonds: 55.00 (a) Tax-free Bonds 442.00 (b) Taxable Bonds 409.30 (c) Special Series Bonds Capital Gain Bonds SCHEDULE - V DEPOSITS Deposits from Housing Finance Companies Deposits from Banks under Rural Housing Fund Other Deposits from Public SCHEDULE - VI BORROWINGS From Reserve Bank of India: Line of Credit From Other Sources: (a) In India (i) Borrowing against Term Deposits (ii) Borrowing through Term Loan (iii) Commercial Papers (b) Outside India CBLO Borrowings (Secured against pledge of Govt. Security and Treasury Bills with CCIL)
88.00
1,284.54 7,485.00
906.30 3.02 9,766.86
240.34 3,763.46 371.95 4,375.75
1. 2. 3.
25.29 5,778.18 223.34 6,026.81
1. 23.69 2. 770.00 4,420.00 47.58 400.92 795.02 6,457.21 3
21.06
280.00 4,972.00 0.00
5,252.00 395.52 389.76 6,058.34
169

Previous Year ` in Crore Schedules
SCHEDULE - VII CURRENT LIABILITIES AND PROVISIONS Interest Payable: (a) Interest Payable on CG Bonds (b) Unclaimed Interest on CG Bonds (c) Interest Payable on Other Bonds and Debentures (d) Interest Payable on Deposits (e) Interest Payable on Other Borrowings (f) Interest Payable on CBLO Borrowing Provision for Retirement Benefits: (a) Medical Expense for Retired Officers (b) Leave Encashment (c) Gratuity (d) Leave Travel Concession (e) Sick Leave (f) Pension Other Provisions: (a) Provision for loss on Forward Exchange Contracts (b) Provision for Standard Assets (c) Provision for Bad and Doubtful Debts u/s 36(1)(viia)(c) of Income Tax Act, 1961 (d) Provision for future Non Performing Assets (e) Provision for diminution in the value of Restructured Accounts (f) Provision for HLA Deposits (g) Others Deferred Profit on Interest Rate Swaps Redemption Payable Account Capital Gains Bonds Overdue Account UN-HABITAT Revolving Fund for implementation of Water & Sanitation Projects SCHEDULE - VIII OTHER LIABILITIES Unsettled transactions of 1991-92 Interest Payable on unsettled transactions SCHEDULE - IX CASH AND BANK BALANCES Cash/ Cheques in Hand Current Account with Reserve Bank of India Balance with other banks (a) In India (i) Current Accounts (ii) Term Deposits with banks (iii) Term Deposits with banks (Staff Benevolent Fund) (b) Outside India Term Deposits with banks
Current Year ` in Crore
1. 9.81 3.07 217.68 80.69 53.49 0.12 2. 0.49 1.01 1.42 2.79 1.39 1.07 2.20 81.71 94.52 10. 00 0.00 0.23 5.80 7.40 25.60 66.11 0.55 667.15 3.
0.66 2.57 330.24 94.72 57.87 0.06 0.48 0.92 1.22 2.66 1.65 0.00 0.46 91.21 115.02 10.00 0.09 0.23 6.15
486.12
6.93
4. 5. 6. 7.
223.16 6.52 2.45 34.38 1.12 760.68 237.20 35.29 272.49 @ 0.04
237.20 35.29 272.49
1. 2.
@ 0.20
1. 2. 3.
8.08 1,350.02 3.83 426.89 1,789.02
21.25 1,700.03 6.94
1,728.22 389.34 2,117.60
@ amount less than ` 0.50 Lakhs
170

Previous Year ` in Crore
SCHEDULE - X INVESTMENTS
Schedules
58.19 749.90 4.91 0.53 0.53
1. 2. 3. 4. 5.
0.15 45.00 858.15
(at cost or market value whichever is less) Government Securities (Pledged with CCIL for CBLO operations) Treasury Bills (Pledged with CCIL for CBLO operations) Shares of Housing Finance Institutions Shares of Building Material Company Less: Depreciation Stocks, shares, bonds, debentures and Securities of other Institutions: (a) Investment in Pass Through Certificates of SPV Trust of which NHB is Trustee (b) Subordinated Bonds
57.78 654.89 6.91 0.53 0.53 0.00
0.03 45.00
45.03 764.61
SCHEDULE-XI LOANS AND ADVANCES
I 1. 10,860.57 92.89 2. 7,760.64 343.16 342.85 3. 53.15 382.85 0.55 19,836.66 0.00 19,836.66 II 4. 5.
Refinance Housing Finance Institutions: (a) Housing Finance Companies (b) Co-operative Housing Finance Societies Scheduled Banks: (a) Commercial Banks (b) Regional Rural Banks (c) Urban Co-operative Banks State Co-operative Agriculture Rural Development Banks/ Land Development Banks Direct Lending Housing Boards, Development Authorities, etc. Water & Sanitation Projects under UN - HABITAT Gross Loans and Advances Less: Provisions for Non Performing Assets Net Loans and Advances
10,891.37 67.18 10,205.36 415.09 416.28
11,036.73 38.18 547.58 0.41 22,581.45 0.00 22,581.45
171
SCHEDULE - XII FIXED ASSETS
` in Crore
COST BLOCK Additions Deletions As at 30. 06.2011 Additions Deletions 35.12 1.17 2.18 1.89 0.08 1.03 0.13 0.39 0.21 17.11 0.90 18.01 0.77 1.76 As at 01.07.2010 As at 30.06.2011 DEPRECIATION NET BLOCK As at As at 30.06.2011 30.06.2010 17.11 0.40 0.42 18.01 0.13 0.35
Description
As at 01.07.2010 0.41 0.15 0 .21 0.40 -
PREMISES
35.12
MOTOR VEHICLE
1.16
FURNITURE AND FIXTURE 0.05 0.08 1.68 1.47 0.11
2.24
172
OFFICE EQUIPMENTS 1.18 0.39 8.41 6.99
1.71
0.08
1.50
0.18
0.24
COMPUTER AND MICROPROCESSOR 1.85 1.85 -
7.62
0.90
0.38
7.51
0.90
0.63
COMPUTER SOFTWARE
0.62
0.62
1.23
ASSETS UNDER RESIDENCE FURNISHING SCHEME 0.04 0.04 0.12 3.68 0.86 0.61 1.12 50.53 47.97
0. 12
0.07
0.02
0.04
0.05
0.07
0.05
Total
47.97
28.56 26.96
2.76 2.20
1.10 0.60
30.22 28.56
20.31 19.41
19.41 20.76
Previous year
47.72

Previous Year ` in Crore
SCHEDULE- XIII OTHER ASSETS
Schedules
Current Year ` in Crore
49.02 5.11 1.68 24.93 0.46 0.46 2.05 6.01 (22.36) 0.97 7.05 149.37 0.84 1.21 225.88
1. Interest Receivable : (a) Bank Deposits (b) Investments 2. Advances, Receivables, Advance Tax & Prepaid Expenses: (a) Staff Loans and Advances (b) Advance Tax, FBT, TDS and Payment of Disputed Tax Demand (net of provisions) (c) Miscellaneous Recoverable Considered Doubtful 0.46 Less : Provisions 0.46 (d) Prepaid Expense (e) Deposit with CCIL including Interest receivable (f) Amount Received/Recoverable from GOI for adjustment of exchange loss on USAID Borrowing (g) Others 3. Interest Receivable on Interest Rate Swaps 4. Unsettled transactions of 1991-92 5. Deferred Discount on Forward Exchange Contract 6. Advance for Development of Software
65.19 5.47 1.58 47.13
70.66
0.00 1.82 6.01 13.85 2.15
72.54 0.52 149.37 1.63 0.00 294.72
SCHEDULE-XIV CONTINGENT LIABILITIES
2.30 2.79 26.12 42.87 0.80 4.00 78.88
1. 2. 3. 4. 5. 6.
Income Tax Deposit under Home Loan Account Scheme Guarantee given for Mortgage Backed Securitisation issue Liability on account of Forward Exchange Contract Liability on account of Capital Commitment Liability on account of unpaid Equity Shares
58.06 2.07 20.00 48.39 0.00 2.00 130.52
173
SCHEDULE-XV Notes forming parts of the accounts (A) Significant Accounting Policies 1 General The Bank prepares its accounts on accrual basis in accordance with the generally accepted accounting principles. Balance Sheet and Profit and Loss Account have been drawn in accordance with the requirements of the National Housing Bank Act, 1987 and National Housing Bank General Regulations, 1988 framed there under. The preparation of financial statements requires that management makes estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported income and expense during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. 2. Revenue Recognition Interest on loans and advances, except in respect of non-performing assets, is accounted for on accrual basis. In respect of non-performing assets, interest is accounted for on receipt basis. Certain items of income (say, prepayment levy, penalty and miscellaneous receipts) are recognized on cash basis. 3. 3.1. Investments Classification Investments are classified into Held for Trading, Available for Sale and Held to Maturity categories as below: (a) The investments that are acquired with the intention to trade by taking advantage of the short-term price/interest rate movements are classified under Held for Trading. These investments are held under this category upto 90 days from the
174
date of acquisition. (b) Investments which are intended to be held up to maturity are classified as Held to Maturity. Investments which are not classified in either of the above categories are classified as Available for Sale. Valuation: In determining acquisition cost of investment: brokerage/commission received on subscriptions is deducted from the cost of securities. brokerage and transfer charges incurred at the time of acquisition are capitalized. Interest accrued up to the date of acquisition of securities (i.e. broken period interest) is excluded from the acquisition cost and charged to the revenue. Individual scrips classified under Held for Trading category, where market quotations are available, are valued at lower of book value or market value. Depreciation, if any, is aggregated category-wise as per the classification of investments prescribed by RBI and recognized in the profit and loss account, while appreciation is ignored. The book value of the individual scrip is changed. Investments under Held to Maturity category are carried at acquisition cost. Wherever the book value is higher than the face value/redemption value, the excess amount is amortized equally over the remaining period of maturity. Investments under Available for Sale category are valued at cost or market price, whichever is lower. Where market quotations are not available, market value for this purpose is arrived at on the basis of realizable price computed as per Fixed Income Money Market and Derivatives Association of India/Primary Dealers Association of India / RBI guidelines. Depreciation, if any, is aggregated
(c)
3.2. 3.2.1. (a)
(b) (c)
3.2.2.
3.2.3.
3.2.4.
category-wise as per the classification of investments prescribed by RBI and recognized in the Profit and Loss Account, while appreciation is ignored. The book value of the individual scrip is not changed. 3.2.5. 3.2.6. Treasury bills and commercial paper are valued at carrying cost. In respect of debentures/bonds etc., where income/principal is not serviced, provision for depreciation is made as per norms of RBI. Investment in equity shares of housing finance companies / building material industries are classified under the AFS category and is valued at cost or market value or on the basis of NAV (net asset value) as ascertained from the latest balance sheet of the company where such companies are not listed whichever is less and in the absence thereof at the rate of Re. 1 per company. Loans and advances Subscription to Special Rural Housing Debentures (SRHDs) of State Co-operative Agricultural & Rural Development Banks (ARDBs)/Land Development Banks (LDBs) in respect of loans for rural housing by their branches/primary banks is shown under Loans and Advances. Advances are classified into standard, Substandard, Doubtful and Loss assets and provisions are made in accordance with the prudential norms prescribed by RBI. Advances are stated net of provision towards non-performing advances. Provision for standard assets as per the RBI Guidelines and provision u/s 36(1)(vii a) (c) of Income Tax Act, 1961 for bad and doubtful assets is grouped in the Balance Sheet under 'Current Liabilities and Provisions'. Fixed assets Fixed assets are stated at historical cost less accumulated depreciation.
175
5.2 5.3
Assets costing below `1000 are charged to revenue. Depreciation on various assets is provided on the following basis:Assets Method of Rate (%) Depreciation 5 10 33.33 20
Written down value 2. Furniture & Fixtures Straight Line 3. Computers , Software Straight Line & Microprocessors Straight Line 4. Other Assets 1. Premises
3.2.7.
5.4
Depreciation on addition to assets is calculated for full period irrespective of the date of acquisition. As separate valuation of land in the value of premises is not available, depreciation on value of premises (including land) has been charged in respect of leasehold premises of the Bank. Staff Benefits Liability for Gratuity, Pension, Sick Leave, Leave Encashment, Medical Retirement Benefits and Leave Travel Concession is determined on the basis of actuarial valuation at the end of the period. Incremental liability is provided for by charging to the Profit and Loss Account.
5.5
4. 4.1
6.
4.2
7.
Pre-paid expenses Pre-paid expenditure of `1 lakhs and below relating to maintenance contract, insurance, subscription/membership fee etc., is charged to current period expenditure.
4.3 4.4
8.
Income Tax Provision for Income Tax for the current period is determined on the basis of taxable income computed after due consideration of legal opinion obtained on relevant issues.
5. 5.1
9.
Deferred Tax Deferred tax is recognized, on timing
difference, being the difference between the taxable income and accounting income for the year and quantified using the tax rates and laws enacted or substantially enacted as on the Balance Sheet date. 10. Wealth Tax Wealth Tax is computed on the net taxable wealth, in possession of the Bank, as per Wealth Tax Act, 1957. 11. 11.1 Foreign Exchange Transactions As per Accounting Standard (AS-11) (Revised 2003) on Accounting for the Effects of Changes in Foreign Exchange Rates issued by the Institute of Chartered Accountants of India; following accounting treatment is given to foreign exchange transactions: Assets and liabilities in foreign currency are revalued at the exchange rate notified by Foreign Exchange Dealers Association of India (FEDAI) as at the close of the year and resultant Exchange difference on revaluation is charged to Profit and Loss Account under the head Gain / Loss on revaluation of foreign Deposits & Borrowings; and Income and Expenditure items are translated at the exchange rates prevailing on the date of the transaction. Accounting for Foreign Exchange Contracts The Bank enters into Foreign Exchange Contracts to establish the amount of Reporting currency required or available at the settlement date of a transaction. The foreign exchange contracts are revalued at the exchange rates notified by FEDAI at the year end. The resultant gain/loss on revaluation is recognized in the Profit & Loss Account under the head 'Gain/Loss on revaluation of Forward Exchange Contract Account'. Premium / Discount are accounted over the life of the contract.
176
c)
The Profit / Loss on cancellation and renewal of foreign exchange contracts are recognised in profit & Loss Account under the head 'Gain/Loss on revaluation of Forward Exchange Contract Account'. Derivative Contracts Interest rate swaps which hedges interest bearing asset or liability is accounted for on accrual basis. Gain or losses on the termination of swaps are recognized over the remaining contractual life of the swap or the remaining life of the asset/liability; whichever is shorter.
12.
(B) 13. 13.1
NOTES Fixed Assets Registration formalities are in progress in respect of commercial property situated at India Habitat Centre, Lodhi Road, New Delhi and residential properties situated at Jangpura Extension, New Delhi and at Tilak Nagar, Mumbai having gross value (i.e., acquisition cost) of `24.90 Crore. In respect of the office space acquired at India Habitat Centre (IHC), Lodhi Road, New Delhi, the exact cost has not been apportioned by IHC among the different allottees. The tripartite agreement, in this respect, is yet to be executed between Land and Development Office (GOI), IHC and institution concerned (i.e., NHB). As such, a sum of `14.81 Crore has been capitalized by the Bank on the basis of payments made to IHC. Depreciation on this leasehold office premises (including land) is charged on WDV @ 5%. The lease amount which is not known could not be amortised over the lease period, in the absence of lease agreement. External Borrowings Under the Housing Guarantee Programme of USAID, the Bank had raised a loan of US $25 million in the US Capital Market in the year 1990-91. The loan is repayable in forty equal half yearly installments commencing from October, 2001. The outstanding
a)
13.2
b)
11.2 a)
b)
14. 14.1
balance of ` 55.88 Crore as on June 30, 2011 is included under the head borrowings from other sources-outside India. Government of India (GOI) has guaranteed the loan and also agreed to bear the exchange loss, if any. The foreign currency funds received under USAID Programme has been parked with Government of India against rupee funds made available by the Government to NHB. Consequently, the exchange risk on the foreign currency funds is being borne by the Government of India. In view of this, the foreign currency funds borrowed from USAID had not been revalued. However, the Bank during the year has changed this practice and revalued USAID borrowings as on June 30, 2011 and interest payable thereon. As a result of this the liability of borrowings from USAID & interest payable on such borrowings increases by `31.14 Crore & ` 0.47 Crore respectively with consequent effect in the balance of amount recoverable from GOI. However, this has no impact on the profit & loss account of the Bank. The Bank received a sum of ` 36.66 Crore in 2008-09 as advance from GOI towards estimated future exchange loss on the above Borrowing. As per the communication received from GOI, further exchange loss if any, shall be claimed from GOI at the end of the period i.e. October'2021. After adjustment of exchange loss till the last instalment paid in April '2011 the outstanding advance as on June 30, 2011 is ` 17.76 Crore. Further, as per the understanding with GOI, the Bank has provided interest @ 6% p.a. on the outstanding advance. As per revaluation of the above borrowing, the loss on revaluation is recoverable from GOI. The loss on revaluation recoverable from GOI as on June 30, 2011, after adjustment of the outstanding advance of ` 17.76 Crore, is ` 13.85 Crore and is shown under 'Other Assets'.
177
14.2
The Bank had borrowed US Dollar 120 million (equivalent to ` 564 Crore outstanding of which, `339.64 Crore as on June 30, 2011) from Asian Development Bank (ADB) in two tranches of USD 100 million and USD 20 million during the year 1997 and 2002, respectively. These loans are guaranteed by the Government of India. The loans are repayable in half yearly installments by 2022 and 2025, respectively. These dollar funds were placed as deposits with Bank of India (USD 50 million), Canara Bank (USD 50 million) and EXIM Bank (20 million) in the overseas branches in terms of agreements with these Banks. The deposits are amortized in half yearly installments which are utilized for repayment of loans from ADB maturing by 2022 and 2025, respectively. In lieu of the USD deposit, these banks have subscribed to Special Series Bonds issued by NHB for ` 564 Crore (`409.30 Crore is outstanding as on June 30, 2011). These Special Series Bonds are repayable in half yearly installments by 2022 and 2025,respectively.
15. 15.1
Revaluation of Foreign Deposits and Borrowings/Forward Exchange Contracts During the year, net loss of `2.04 Crore on revaluation of foreign deposits and borrowings has been recognized in the Profit and Loss Account under head 'Loss / (Gain) on revaluation of Foreign Deposits and Borrowings'. In order to hedge forex risk on account of the excess inflow of USD, the Bank has entered into forward exchange contracts. During the year July, 2010 to June, 2011, forward exchange contracts for USD 0.855 million were cancelled and fresh contracts for a value of USD 1.24 million were entered. As on June 30, 2011, the Bank has 20 outstanding contracts for an aggregate amount of USD 10.825 million. The total unhedged amount as on June 30, 2011 was USD 6.15 Million.
15.2
15.3
During the year ended June 30, 2011, NHB has booked gains on forward exchange contracts of `1.61 Crore in the Profit and Loss Account under the head 'Gain on Forward Exchange Contracts'. Out of this gain, `0.08 Crore has been booked on maturity of contracts. Employee's Benefits (AS-15) The Bank has provided the liability towards employee benefits for Gratuity, Leave Encashment, Medical Retirement Benefits, Sick Leave, Leave Travel Concession and Pension on actuarial basis for its permanent employees in accordance with the revised AS-15 issued by ICAI. The Bank is transferring its contribution of provident fund to Reserve Bank of India in respect of its employees who have opted for Contributory Provident Fund. During the year ended June 30, 2011, the Bank has contributed `0.03 Crore to Provident Fund and has charged the same to Profit and Loss Account under the head 'Staff Salaries, Allowances and Terminal Benefits'. As per National Housing Bank (Employees') Pension Regulations, 2003, the Bank provides for pension, a defined benefit
16. 16.1
retirement plan covering all employees who have opted for pension plan. The scheme provides a monthly pension payment to employees on retirement or termination of employment. The scheme is managed by a separate trust and the liability for the same is recognized on the basis of actuarial valuation in addition to Bank's monthly contribution to the fund. During the year ended June 30, 2011 the Bank has contributed `1.74 Crore to Pension Fund and charged same to Profit and Loss Account under the head 'Staff Salaries, Allowances and Terminal Benefits'. 16.4 Defined benefit Obligations: Gratuity, Leave Encashment, Medical Retirement benefits, Sick Leave, Leave Travel Concession and Pension payable to employees. Methodology used in actuary calculation: Actuary has used the Projected Unit Credit Method to assess the plan's liabilities including those related to death and service. A reconciliation of opening and closing balances of present value of defined benefit obligation and the effects during the period attributable to each of the following: Amount in ` As on June 30, 2011
16.2
a)
b)
16.3
Change in benefit obligations Present Value of Obligation at the beginning of the year Current Service Cost Interest cost Actuarial (Gain)/Loss on Obligations Benefits paid Present Value of Obligation at the end of the year
Gratuity 14,169,237
Leave
Medical 4,899,635
Encashment
10,110,797
Sick Leave Travel Pension Leave Concession 3,899,736 27,868,807 176,282,576
952,228 1,133,539 358,110
752,919 808,864 140,581
208,483 379,722 (336,407)
580,176 1,111,979 925,069
1,046,020 2,229,505 586,588
0 14,102,606 12,197,673
(4,382,925) 12,230,189
(2,647,033) 9,166,128
(407,974) 4,743,459
16,516,960
(5,106,043) 26,624,877
(11,656,824)
190,926,031
178
c)
Amount recognized in the statement of Profit & Loss Account is charged under the head Gratuity, Salary, Allowances & Terminal Benefits, Medical Expense to Retired Staff, Sick Leave, Leave Travel Concession and Pension.
Amount in ` As on June 30, 2011

Defined Benefits Gratuity Leave Encashment
752,919 808,864 NA 140,581 1,702,364
-
Medical
Current Service Cost Interest Cost Expected return
952,228 1,133,539 NA 358,110 2,443,877

-
208,483 379,722 NA (336,407) 251,798 107,189
Leave Travel Concession 580,176 1,046,020

1,111,979 NA 925,069 2,617,224
-
Sick Leave
Pension
2,229,505 NA 586,588 3,862,113

-
14,102,606 16,250,074 14,578,560 12,431,092

-
on plan assets
Actuarial (Gain)/Loss Expenses/ (Income) Less: Amount contributed by ex employees Expenses/(Income) recognized in the statement of Profit and Loss Account by debit to expense / credit to provisi on no longer required Account d)
2,443,877
1,702,364
144,609
2,617,224
3,862,113
12,431,092
Investment details of plan assets: The Bank has not funded the liability as on June 30, 2011. As such there is no fair value of assets except for pension liability which is managed by a separate trust.
e)
The Principal Actuarial assumptions used as at the Balance Sheet date:
179
Defined Benefits
Discount Rate Salary Escalation Rate Expected return on plan assets Mortality Rate
Gratuity
Leave Encashment
8% p.a. 6% p.a. NA LIC (1994-96) published table of Mortality Rates 60 3% at younger ages and reducing to 1% at older ages according to graduated scale. NA
Medical
Amount in ` As on June 30, 2011 Sick Leave Pension Leave Travel Concession
8% p.a. 6% p.a. NA LIC (1994-96) published table of Mortality Rates 60 3% at younger ages and reducing to 1% at older ages according to graduated scale. NA 8% p.a. 6% p.a. NA LIC (1994-96) published table of Mortality Rates 60 3% at younger ages and reducing to 1% at older ages according to graduated scale. NA 8% p.a. 6% p.a. 16,250,074 LIC (1994-96) published table of Mortality Rates 60 3% at younger ages and reducing to 1% at older ages according to graduated scale. NA
8% p.a. 6% p.a. NA LIC (1994-96) published table of Mortality Rates 60 3% at younger ages and reducing to 1% at older ages according to graduated scale. NA
8% p.a. 6% p.a. NA LIC (1994-96) published table of Mortality Rates 60 3% at younger ages and reducing to 1% at older ages according to graduated scale. 16%. Adjustments could be made later depending on the experience of the scheme.
Retirement Age Withdrawal Rate
Morbidity Rate
f) Change in plan assets

Defined Benefits Gratuity Leave Encashment
NA
Amount in ` As on June 30, 2011

Medical Sick Leave
NA
Leave Travel Concession

NA
Pension
Fair value of plan assets at the beginning of the year Expected return on plan assets Actuarial Gain/(Loss) Benefits paid Employer contributions Fair value of plan assets at the end of the year*
NA
NA
177,002,336
NA
NA
NA
NA
NA
16,250,074
NA NA NA NA
NA NA NA NA
NA NA NA NA
NA NA NA NA
NA NA NA NA
(2,380,887) (11,656,824) 18,764,903 197,979,602
180
* The Bank has not funded the liability as on June 30, 2011. As such there is no fair value of assets except liability for pension. g) Reconciliation of present value of the obligation and the fair value of the plan assets Amount in ` As on June 30, 2011 Defined Benefits Gratuity Leave Medical Sick Leave Pension Travel Encashment Leave Concession Fair value of plan assets at the end of the year Liability at the end of the year NA NA NA NA NA 197,979,602
12,230,189
9,166,128 (9,166,128)
4,743,459 (4,743,459)
16,516,960
26,624,877 190,926,031 7,053,571#
Net asset/(Liability) (12,230,189) recognized in Balance Sheet
(16,516,960) (26,624,877)
#Surplus not recognized in the accounts. 17. Revenue Recognition Interest on loans and advances, except in respect of non-performing assets, is accounted for on accrual basis. In respect of non-performing assets, interest is accounted for on receipt basis. Certain items of income (say: prepayment levy, penalty and miscellaneous receipts) are recognized on cash basis. However, such income is not considered to be material. 18. 18.1 Security Transactions of 1991-92 A sum of ` 237.20 Crore appearing in the Balance Sheet under the head "Other Liabilities" includes a sum of ` 237.06 Crore representing the decreed amount received from State Bank of Saurashtra (SBS), since amalgamated with State Bank of India in September, 2008, in a suit filed by NHB. This amount will be adjusted on final disposal of the appeal filed by SBS and NHB in the Supreme Court. The sum of ` 149.37 Crore appearing in the Balance Sheet under the head "Other Assets" represents the sum of ` 95.40 Crore paid by the Bank to SBS during 1991-92 for purchase of securities and ` 53.97 Crore paid by the Bank to the custodian pursuant to the orders of the special court. Both the amounts and interest thereon, if any, will be adjusted on final disposal of the appeal filed by the SBS and NHB in the Supreme Court. 18.3 A sum of ` 40.25 Crore was appearing in the books of NHB as unclaimed amount since 1991-92. While passing a Decree in the year 1999 in favour of NHB in the above suit against SBS, the special Court noted this fact and directed NHB to deposit a sum of ` 40.22 Crore with the Custodian, which was duly deposited. Provision of Rs.35.29 Crore for interest has been made on the above sum from 199192 till date of deposit with the Custodian. The provision of ` 35.29 Crore and the unclaimed balance of ` 0.03 Crore is being shown under the head Other Liabilities' and will be adjusted on final disposal of the appeal pending in the
18.2
181
Supreme Court as referred above. 18.4 The disputes between NHB & SBI and NHB & Grindlays Bank (since amalgamated with Standard Chartered Bank) have been settled and no claim exists between the parties against each other. However, any money to be recovered from the estate of the late Sh. Harshad Mehta by SBI and Standard Chartered Bank in accordance with the decrees passed in their favour by the Special Court will be shared by them with NHB in the agreed manner and will be accounted for on actual receipt. As per the Terms of the Settlement agreed between the State Bank of India and the National Housing Bank on October 30, 2002, the National Housing Bank was to cooperate with the State Bank of India in Miscellaneous Petition No.63 of 1992 and recoveries made if any in the said petition was to be shared between the State Bank of India and the National Housing Bank in such proportion as may be determined by the Reserve Bank of India. Pursuant to Hon'ble Supreme Court orders
18.5
dated January 6 and February 21, 2011, the Special Court at Mumbai, has directed distribution of the amounts realized from the estate of Harshad Mehta. After distribution of the amount to the Income Tax department in the priority period, the Special Court has directed that in favour of decree holder the remaining amount be distributed depending upon the date of decrees. A sum of `100 Crore has been directed to be released to SBI against its decree in Suit No. 41 of 1995 and Misc. Petition No. 63 of 1992. The decree in Suit No.41 of 1995 is of `137.11 Crore and in Misc. Petition No. 63 of 1992 it is ` 706.97 Crore. Clarification with regard to the decree, against which the appropriation of ` 100 Crore had been made, is sought from SBI. 19. Segment Reporting The Bank's operations predominantly comprise only one segment i.e. financial activities. Hence, there are no separate reportable segments as per the Accounting Standard on Segment Reporting (AS 17) issued by the Institute of Chartered Accountants of India.
20.
Related Party Transactions List of Related Parties: Key Managerial Personnel : Shri R. V. Verma Name of the Party Nature of Relationship Key Managem ent Personnel Ex- Chairman & Managing Director Key Management Personnel Chairman & Managing Director Nature of Transaction Remuneration & benefits including perquisites Amount of transaction during the year `1.64 lakhs (paid to Central Bank of India towards Gratuity) `14.48 lakhs Outstanding
Shri S. Sridhar (Upto14 .09.2010)
Shri R.V.Verma (w.e.f. 15.09.2010)
Remuneration
& benefits including perquisites
182
As the Bank is state controlled enterprise within the meaning of AS-18 'Related Party Transaction', the details of the transactions with other state controlled enterprises are not given. 21. 21.1 Income tax The provision for income tax of `129.00 Crore for the current year (previous year `136.00 Crore) has been made as per applicable enactments. The Hon'ble Income Tax Appellate Tribunal (ITAT) vide its order dated 26.02.2009 held that the Bank is not liable to Income Tax under the Income Tax Act 1961 for AY 2002-03. Against the said order, the Income Tax Department has sought permission from COD for filing an appeal before the Hon'ble High Court. However, the bank has not received any notice from the Hon'ble High Court in this regard. In view of the legal opinion obtained the Bank has written back provision for Income Tax of `58.06 Crore and has also not retained DTL. The Bank has, however, retained special reserve of ` 53.39 Crore for the said year.
21.3
Income Tax Assessments have been completed disallowing the claims in respect of the Special Reserve created u/s 36(1)(viii) of the Income Tax Act, 1961 for the AYs 2003-04 to 2008-09 and business loss of `150.45 Crore in respect of AY 2003-04. The Bank has preferred appeals against the said disallowances before CIT(Appeals) / ITAT. However, the demands raised have been duly paid/ adjusted. In view of the legal opinion obtained, the Bank is of the view that the claim would be considered in its favour. During the year, the Bank has made additional provisions for tax of `39.71 Crore (net) for said years and also created deferred tax liability of `15.36 Crore for AYs 2007-08 and 2008-09. The Bank is holding necessary provisions for tax after considering claim u/s 36(1)(viii). However, the Bank has maintained deferred tax liability, to the extent of tax on such claim, for the aforesaid years. The year-wise details are given as under:
21.2
(` in Crore)
Assessment Year
Tax Demand
Tax Provision already held 3 23.09 42.00 30.83 40.00 69.30 79.80 285.02
Additional provision / (Reversal of excess provision) 4 51.88 15.76 (14.02) 2.14 (11.82) (4.23) 39.71
183
Difference
Deferred Tax Liability maintained 6 3.35 23.25 17.78 7.01 11.64 3.72 66.75
1 2003 - 04 2004 - 05 2005 - 06 2006 - 07 2007 - 08 2008 - 09 Total
2 78.32 81.0 1 34.59 49.15 69.12 79.29 391.48
5=(2 - 3 - 4) 3.35 23.25 17.78 7.01 11.64 3.72 66.75
21.4
In respect of AY2009-10, the Bank is holding provision for tax without considering the deduction u/s 36(1)(viii) of the Income Tax Act, 1961. During the year, the Bank has also created the deferred tax liability of `3.83 Crore for the said assessment year.
22. Deferred Tax 22.1 Deferred Tax Assets and Liabilities arising on account of timing differences and which are capable of reversal in subsequent periods are recognized using tax rates and tax laws that have been enacted or subsequently enacted till the date of the Balance Sheet. Deferred Tax Assets are not recognized unless there is 'virtual certainty'that sufficient future taxable income will be available against which such deferred tax assets will be realized. 22.2 As on June 30, 2011, the Bank has recorded net deferred tax liability (DTL) of ` 91.79 Crore. A composition of deferred tax assets and liabilities into major items is given below:
21.5
Finance [No.2] Act, 2009 has substituted a part of the Explanation to clause (viii) of sub-section (1) of Section 36 of the Income Tax Act 1961 by which the activities of the Bank have been specifically covered from AY 2010-11. As per the legal opinion obtained, claim of the Bank under section 36(1)(viii) of the Income Tax Act for the years prior to the AY 2010-11 is not adversely affected in any manner.
(` in Crore)
Sl. No. Deferred Tax Assets: 1 2 3 4 5 Provision for Medical aid to Retired Staff Provision for Leave Encashment Provision for Gratuity Provision for Leave Travel Concession Provision for expenses Total Deferred Tax Assets (A) Deferred Tax Liabilities: 1 2 Depreciation Special Reserve u/s 36(1)(viii) of Income Tax Act, 1961 (Rs.75.04 Crore for the AYs 2003 - 04 to 2009 - 10) Total Deferred Tax Liabilities (B) Net Deferred Tax Liability (B - A) 93.50 91.79 8 4 .83 8 2 .3 0 1.11 92.39 1.02 8 3 .81 0.15 0.30 0. 40 0.86 0. 00 1.71 0.16 0. 34 0. 47 0. 93 0. 63 2. 53 Particulars June 30, 2011 June 3 0, 201 0
184
22.3
During the year ended June 30, 2011, an amount of `9.49 Crore has been charged to the 'Profit and Loss Account' towards deferred tax and DTL has been increased to that extent. Home Loan Account Scheme The Home Loan Account Scheme (HLAS) was launched by NHB with effect from July 1, 1989 all over the country and was operated through Scheduled Banks and Housing Finance Companies (HFCs). The HLAS has been discontinued effective from March 1, 2004. The assets and liabilities referred to above are identical and have been shown as contra entries in the Balance Sheet. The deposits under HLAS held by the banks/HFCs aggregating `2.07 Crore was disclosed in the balance sheet as reported by the banks/HFCs as on March 31, 2011. India Housing Finance and Development
23. 23.1
23.2
23.3
Ltd., a housing finance company in the private sector, which was one of the participating HFC for mobilization of deposits under HLAS, was advised by NHB not to open new accounts/accept fresh deposits under HLAS with effect from 01.10.1994 due to serious financial problem faced by it. NHB being the principal under the scheme, was obliged to meet liability to pay account holders their dues. The Bank assessed the initial liability of `0.49 Crore as against verifiable claimants of IHFD under HLAS and made provision of the equal amount in 2004-05. As per the approved procedure, claims for refund of `0.26 Crore was paid till June 30, 2011 and balance of `0.23 Crore stood as liability as on that date. 24. Other Expenditure The break-up of other expenditure shown in the Profit and Loss Accounts is as under:
23.4
(` in Crore) Particulars 1. Repair and Maintenance 2. Research and Development 3. Service Tax Expense 4. Prior Period Expense 5. Conveyance Expense 6. Professional Fee 7. Conference Expense 8. Hospitality Expense 9. Expenses on IT related services 10. Payment to outsourced services 11. Security Service Expense 12. Others Total Current year 1.33 0.23 0.32 0.19 0.81 0.26 0.13 0.09 0.82 0.86 0.79 1.63 7.46 Previous 1.31 0.40 0.31 0.02 0.70 0.23 0.15 0.09 0.86 0.92 0.61 1.86 7.47
185
25.
Investment Fluctuation Reserve Account As per RBI guidelines on prudential norms for classification, valuation and operation of investment portfolio for FIs, the provision required to be created on account of depreciation in the Available for Sale category in any year should be debited to the Profit & Loss Account and an equivalent amount (net of taxes) or balance available in the Investment Fluctuation Reserve (IFR) Account, whichever is less, shall be transferred from Investment Fluctuation Reserve Account to the Profit & Loss Account. In the event provisions created on account of depreciation in the available for sale category are found to be in excess of the required amount in any year, the excess is credited to the Profit & Loss Account and an equivalent amount (net of taxes, if any) is appropriated to the Investment Fluctuation Reserve Account. During the year, the Bank has not transferred/withdrawn any sum to/ from Investment Fluctuation Reserve as there is no depreciation/reversal on investment in AFS category. 28.
countries of the Asia Pacific Region. Till June 30, 2011, NHB received USD 106,000 (equivalent to ` 0.46 Crore) towards the cost of the said project from UNESCAP. The account in respect of the amount received and utilization there of towards the cost of study has been maintained separately and grouped under the head as 'others' under 'Current Liabilities and Provisions'. Till June 30, 2011, an amount of `0.35 Crore has so far been utilized and balance of `0.11 Crore has been paid back to the agency during the year. United Nation Human Settlement Programme The Bank has received a revolving fund of `1.12 Crore (equivalent to US$ 251,250) for onward lending to Micro Finance Institutions towards Water and Sanitation Programme in India. The amount has been shown separately under 'Current Liabilities and Provisions'. Till June 30, 2011, the Bank has disbursed `0.55 Crore (of which `0.41 Crore is outstanding as on June 30, 2011) and the same is shown separately under the head 'Loans and Advances'. The Bank has earned an amount of `0.04 Crore towards interest on the disbursement made under the programme till June 30, 2011 and the same has been considered as income of the Bank 29. Investment classification As stated, investments are classified into
26.
Impairment of assets In the opinion of the management, there is no material impairment of any of the Fixed Assets of the Bank as per the Accounting Standards 28-Impairment of Assets.
27.
Study on Pro-poor Housing NHB and United Nations Economic and Social Commission for Asia and Pacific (UNESCAP) have jointly undertaken a study on pro-poor housing finance in select
186
Held for trading, Available for Sale and Held for Maturity categories as per the following details:.
(` in Crore)
Categories of investment Held to Maturity (HTM) Investments a) GOI Dated Securities b) Investment in Pass Through Certificates of the SPV Trust of which NHB is Trustee c) Subordinated Bonds Sub-total a) Treasury Bills b) Stocks of Housing Finance Institutions c) Building Material Company Sub-total Gross Investments Depreciation Net Investments As on June 30, 2011 57.78 0.03 As on June 30, 2010 58.19 0.15
Available for Sale (AFS)
45.00 102.81 654.89 6.91 0.53 662.33 765.14 0.53 764.61
45.00 103.34 749.90 4.91 0.53 755.34 885.67 0.53 858.15
Less:
30. Contingent Liability The movement in Contingent Liability as required in AS - 29 is as under: (` in Crore) Particulars Opening Balance as on July 1, 2010 Addition during the period Reduction during the year Closing Balance as on June 30, 2011 31. Rural Housing Fund Rural Housing Fund was first established as per the announcement made by the Hon'ble Finance Minster, while presenting the budget for the year 2008-09. The fund was set up with contribution by scheduled commercial banks not achieving their priority sector lending obligations. The fund was set up with National Housing Bank (NHB) to enhance its refinancing operations to the rural housing sector. For the 2008-09 the Bank has received an amount of `1,778.18 Crore as against the allocation of ` 2,000 Crore by Reserve Bank of India. Similarly, Government had allocated `2,000 Crore for the year 2009-10 under the Rural Housing Fund and the Bank has received entire allocation of
187
June 3 0 , 2011 78.88 61.27 (9.63) 130.52
June 3 0, 2010 129.67 0.00 (50.79) 78.88
32.
`2,000 Crore. Further, Government of India allocated `2,000 Crore for the year 2010-11. Against this allocation, the Bank received the entire amount of `2,000 Crore by June 30, 2011. Thus total amount under Rural Housing Fund is `5,778.18 Crore as on June 30, 2011. Zero Coupon Bonds During the year 2008-09, the Bank had issued Zero Coupon Bonds (ZCBs) for a face value of ` 1,050 Crore, discounted value being `453.39 Crore. These bonds were issued for tenure of ten years. The discount is amortised over the tenure of the bonds. A sum of `59.63 Crore has been amortised during the financial year 2010-11. The unamortized balance as on June 30, 2011 is `451.09 Crore.
33.
34.
Further, the Bank has issued Zero Coupon Bonds (ZCBs) during the year 2010-11 for a face value of `800 Crore, discounted value being `642.17 Crore. These bonds were issued for tenure of three years with put/call option after 366 days. The discount is amortized over the tenure of bonds. A sum of `43.46 Crore was amortized during the period. The unamortized balance as on June 30, 2011 is `114.37 Crore. Interest Rate Swaps The Bank during the month of May, 2007 introduced a new product of floating rate refinance linked to 1 year INBMK rate. In order to hedge the lending of refinance priced on the same bench mark, the Bank entered into Interest Rate Swap transactions wherein NHB would receive fixed rate of interest on the notional principal and pay floating rate of 1 year INBMK insulating NHB from any variations in the market benchmark. The Bank had entered into fourteen Interest Rate Swaps for a notional principal amount of `1,500 Crore during 2006-07 and 2007-08 with various counter parties. Out of the above, Interest Rate Swaps for a notional principle of `900 Crore were outstanding as on July 1, 2010. During the period July 2010 to June 2011, the Bank has further unwound four contracts of Interest Rate Swap (IRS) for a notional principal of `400 Crore. The amount received on termination of these IRS is recognized over the remaining contractual life of the swap. Accordingly, the Bank has earned a profit of `3.80 Crore on the IRS unwound during the year of which `1.15 Crore has been booked during the year and the balance profit of `2.65 Crore will be booked over the residual maturity period of the IRS. As on June 30, 2011, the Bank has five IRS outstanding with notional principal of `500 Crore. Securitisation NHB is authorized to carry out securitization transactions and issue mortgage backed securities as trust
188
35.
certificates of beneficial interest and act as Trustee for the holders of such securities under the National Housing Bank Amendment Act, 2000 (Sections 14 (ea), 14 (eb), 14 (ec) and 18). During the calendar year 2000-2007, NHB has completed 14 residential mortgage backed securitization (RMBS) transactions involving 38,809 individual housing loans of six Housing Finance Companies (HFCs) and one Scheduled Commercial Bank, for `862.20 Crore. The transaction involves assignment and transfer of a pool of housing loans along with the underlying mortgages, from the primary lending institution to NHB. Simultaneously, an express declaration of trust is made by NHB in respect of the mortgage debt, appointing itself as the trustee for the benefit of the investors. Once the assets have been declared property in trust (the Trust), the Trust will issue Pass Through Certificates to investors. During the financial years 2008-09 & 2009-10, 6 RMBS transactions and their respective Special Purpose Vehicle trust have been closed. Similarly, during the financial year 2010-11, 1 RMBS transaction has been closed. As on June 30, 2011, 7 RMBS transactions totaling to `58.79 Crore are outstanding. Loan and advances Of the total outstanding loans and advances of `22,581.45 Crore, loan and advances amounting `5,668.55 Crore are secured by a charge on books debts, government guarantee, bank guarantee, equitable mortgage on fixed assets, hypothecation of movable assets and lien over bank deposits. Balance loans and advances amounting `16,912.90 Crore are unsecured. The Bank has restructured a loan amounting `1.29 Crore, having an outstanding balance of `1.06 Crore as on 30.06.2011, has been classified as Standard Assets. The Bank has made provision @ 2% on the said outstanding in terms of RBI circular RBI 2010-11/529 DBOD.No.BP.BC 94/21.04.048/2011-12. The Bank has also made for diminution in the fair value assets.
36. 36.1
Consolidation of Special Fund with the General Fund The Voluntary Deposits (Immunities and Exemptions) Act, 1991 was passed with the objectives of providing certain immunities and exemptions from direct taxes to persons making voluntary deposits with the National Housing Bank and exemptions from direct taxes in relation to such amounts. The amount so collected under the Voluntary Deposits Scheme is required to be kept in a Special Fund exclusively for the purpose of financing slum clearance and low cost housing for the poor. In terms of National Housing Bank (Slum Improvement & Low Cost Housing Fund) Regulations, 1993, Profit and Loss Account for the year ended 30th June and Balance Sheet as on that date are required to be prepared each year in respect of the Special Fund and audited by the Statutory Auditors appointed by the
36.2
Reserve Bank of India under Section 40 (1) of the National Housing Bank Act, 1987. Accordingly, the Profit and Loss account and the Balance Sheet of the Special Fund have been prepared as per the provision of the National Housing Bank (Slum Improvement & Low Cost Housing Fund) Regulations, 1993 and attached as Annexure to these financial statements. The balance lying in the Special Fund is included under the head Reserves in the Bank's consolidated Balance Sheet. Various assets and liabilities of the Special Fund have also been grouped in the consolidated Balance Sheet under the respective heads. Regrouping Figures for the previous year have been regrouped, wherever necessary, so as to make them comparable with those of the current year.
(` in Crore)
37.
38. (a) Cash Flow Statement for the year ended June 30, 2011
A) CASH FLOW FROM OPERATING ACTIVITIES Net Profit as per Profit & Loss Account Adjustments for: Provision for Tax Excess Provision for Income Tax Provision for Wealth Tax Provision for Deferred Tax Depreciation on fixed assets Write offs Depreciation on investments & amortization expense Provisions of diminution in the Fair value of Restructured Advances Provision for Standards Assets Loss on revaluation of deposits and borrowings Provision for Bad Debts u/s 36(1)(viia)(c) of IT Act Profit on sale of Fixed Assets Gain on Forward Exchange Contract Provisions no longer required written back Income from Investments Profit on purchase and sale of Mutual Funds Dividend on Equity of Housing Finance Companies Operating Profit before working capital changes
189
278.93 198.88 (88.23) 0.13 9.49 2.76 0.15 0.41 0.09 9.50 2.04 20.50 (0.06) (1.61) (0.04) (38.12) (5.93) (0.34) 388.55
Adjustments for Working Capital (Increase)/Decrease in Deposits with Banks (Increase)/Decrease in Loans & Advances (Increase)/Decrease in Other Assets Increase/(Decrease) in Current Liabilities Net cash from operating activities before taxes paid Less : Income Taxes Paid NET CASH FLOW FROM OPERATING ACTIVITES BEFORE EXTRAORDINARY ITEMS (A) B) CASH FLOW FROM INVESTING ACTIVITIES BEFORE EXTRAORDINARY ITEMS (Increase) / Decrease in Fixed Assets (Increase)/Decrease in Investments Income from Investments Profit on purchase and sale of Mutual Funds Dividend on Equity of Housing Finance Companies NET CASH GENERATED FROM INVESTING ACTIVITES BEFORE EXTRAORDINARY ITEMS Extraordinary items NET CASH GENERATED FROM INVESTING ACTIVITES AFTER EXTRAORDINARY ITEMS (B) C) CASH FLOW FROM FINANCING ACTIVITIES Net income under Staff Benevolent Fund Increase / (Decrease ) in Bonds & Debentures Increase / (Decrease ) in Deposits Increase/(Decrease) in Borrowings NET CASH GENERATED FROM FINANCING ACTIVITES ( C) Net increase in cash and cash equivalents (A+B+C) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
38 (b) Schedule to Cash & Cash equivalents
(317.60) (2,627.25) (51.31) (48.01) (2655.62) (132.90)
(2,788.52)
(3.61) 93.13 38.12 5.93 0.34 133.91 0.00 133.91 0.39 1,415.04 1,651.06 (398.87) 2,667.62 13.01 8.28 21.29
At the beginning of the year At the end of the year
Particulars
Cash in hand Balance with Reserve Bank of India Balance with banks-Current Account Cash and cash equivalent after exchange rate adjustments
0.00 0.20 8.08 8.28
0.00 0.04 21.25 21.29
39. Additional Disclosures as per RBI Guidelines

39.1 Capital:
Particulars
30.06.2011 20.64% 19.39% 1.25%

190
30.06.2010
a.
(i) Capital to Risk Assets Ratio (CRAR) (ii) Core CRAR (iii) Supplementary CRAR
19.59% 18.34% 1.25%
b. c.
Amount of subordinated debt raised and outstanding as Tier II Capital: Nil (Previous Year-Nil) Risk Weighted Assets: Particulars (i) On balance sheet items (ii) Off balance sheet items 30.06.2011 14,256.37 27.25
(` in Crore) 30.06.2010 13,512.63 36.86
d. 39.2 e. f.
Share-holding pattern as on the date of the Balance Sheet: Capital of the Bank is wholly subscribed by the Reserve Bank of India Asset Quality & Credit Concentration : Percentage of Net NPAs to Net Loans and Advances : Nil (Previous Year-Nil) Amount and percentage of Net NPAs under the prescribed asset classification categories : (` in Crore)
Particulars
Amount
Sub -Standard Doubtful Loss Total g. Amount of provisions made during the year: 0.00 0.00 0.00 0.00
30.06.2011 %age 0.00 0.00 0.00 -
Amount 0.00 0.00 0.00 0.00
30.06.2010 %age 0.00 0.00 0.00 (` in Crore)
Particulars - Standard Assets - Bad Debts u/s 36(1)(viia) of the IT Act, 1961 - Investments - Wealth Tax - Income Tax -Earlier Years - Income Tax -Current Year - Deferred Tax (net) h. Movement in net NPAs:
30.06.2011 9.50 20.50 0.41 0.13 69.88 129.00 9.49
30.06.2010 0.00 22.00 0.31 0.07 0.00 136.00 5.79
There is no movement in net NPA being net NPA is Nil (Previous Year-Nil) i. Credit exposure as percentage to capital funds and as percentage to Total Assets:
30.06.2011 % age to % age to Capital Fund total assets 62.48% 7.15% 82.66% 9.46% 467.63% 53.49% 106.51% 12.18% 30.06.2010 % age to % age to Capital Fund total assets 67.05% 7.82% 85.68% 10.00% 452.35% 52.78% 234.60% 27.38%
Particulars The largest single borrower The largest borrower group The 10 largest single borrowers The 10 largest borrower groups$ $ NHB has only two borrower groups
191
j. 39.3 k. l.
Credit exposure to the five largest industrial sector as percentage to total loan assets: Not Applicable Liquidity: Maturity Pattern of rupee assets and liabilities Maturity Pattern of foreign currency assets and liabilities Items (` in Crore) Less than or More than a More than More than More than Total 5 years equal to 1 year upto 3 3 years upto 7 years upto 7 5 years year years years
Rupee Assets Foreign Currency Assets Total Rupee Liabilities Foreign Currency Liabilities Total
9,905.20 22.97 9,928.17 10,745.32 26.92 10,772.24
11,182.62 50.71 11,233.33 3,090.11 58.10 3,148.21
2,773.11 57.85 2,830.96 2,443.62 64.42 2,508.04
1,153.15 66.04 1,219.19 4,966.03 71.61 5,037.64
377.35 191.77 569.12 4,140.17 174.47 4,314.64
25,391.43 389.34 25,780.77 25,385.25 395.52 25,780.77
39.4
Operating results: 2010-11 2009-10
Particulars
m. Interest Income* as a percentage to average Working Funds n. Non - interest income as a percentage to average Working Funds o. Operating profit as a percentage to average Working Fund
7.74% 0.04% 1.72% 1.11% 3.21
7.27% 0.17% 2.14% 1.35% 3.15
p. Return on average Assets q. Net Profit per employee (Rs. in Crore)

* including dividend on investments 39.5 I. Movement in the provisions: Provisions for Non Performing Assets (Loan Assets)
(` in Crore)
Particulars Opening balance as at the beginning of the financial year Add : Provisions made during the year Less: Write off, write back of excess provision Closing balance at the close of the year
2010-11
2009-10
10.00 0.00 0.00 10.00
10.00 0.00 0.00 10.00
Note: The Bank is holding provision for NPA but does not have any NPA as on 30.06.2011
192
II. Provisions for Depreciation in Investments (` in Crore)
Particulars Opening Balance at the beginning of the financial year Add: i) Provisions made during the year ii) Appropriation, if any, from Investment Fluctuation Reserve Account during the year Less : i) Write off during the year ii) Transfer, if any, to Investment Fluctuation Reserve Account Closing balance at the close of the financial year
39.6 Restructured Accounts:
2010-11 0.53 0.00 0.00 0.00 0.00 0.53
2009-10 7.12 0.00 0.00 0.00 6.59 0.53
Particulars a) Total Amount of loan assets b) Sub-standard/doubtful assets

39.7
(` in Crore) 2010-11 2009-10 1.06 1.18 Nil Nil (` in Crore)
Financial Assets Sold to Securitisation Company / Reconstruction Company:
Particulars
a) No. of Accounts b) Aggregative value (Net of Provisions) of Accounts sold to SC/RC c) Aggregate consideration d) Additional consideration realized in respect of Accounts transferred in earlier years e) Aggregate gain / loss over net book value
39.8 Forward Rate Agreements and Interest Rate Swaps:
2010-11
2009-10
0 0.00 0.00 0.00 0.00
0 0.00 0.00 0.00 0.00
(` in Crore)
Particulars a) Notional principal of swap agreements b) Nature and terms of the swaps
2010-11 500 Fixed to Floating Hedge Interest Rate Swap
2009-10 900 Fixed to Floating Hedge Interest Rate Swap
c) Quantification of losses which would be incurred if the counter parties failed to fulfil their obligations under the agreements d) Collateral required by the entity upon entering into swaps e) Any concentration of credit risk arising from the swaps f) The "Fair" value of total swaps book
3.55 NA 3.55 0.59
48.34 NA 48.34 39.34
193
39.9
Interest Rate Derivatives: Nil (Previous Year-Nil)
39.10 Investments in Non Government Debt Securities: A. Issuer Categories in respect of investments made (` in Crore) Amount of
Sl. No. Issuer Amount investments ' below 'unrated' made investment Securities through grade' held private Securities placement held 'unlisted' Securities
(1) 1 2 3 4 5 6 7
(2) PSUs FIs Banks Private Corporates Subsidiaries/Joint Ventures Others Provisions held towards depreciation Total Previous Year
(3) 0.00 0.00 45.00 0.00 0.00 0.03 0.00 45.03
(4) 0.00 0.00 45.00 0.00 0.00 0.03 0.00 45.03
(5) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(6) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(7) 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.03
(` in Crore)
Amount of
Sl. No.
Issuer
Amount
(1) 1 2 3 4 5 6 7
(2) PSUs FIs Banks Private Corporates Subsidiaries/Joint Ventures Others Provisions held towards depreciation Total
(3) 0.00 0.00 45.00 0.00 0.00 0.15 0.00 45.15
investments ' below 'unrated' made investment Securities through held grade' private Securities placement held (4) (5) (6) 0.00 0.00 0.00 0.00 0.00 0.00 45.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.15 0.00 0.00 0.00 0.00 0.00
'unlisted' Securities
(7) 0.00 0.00 0.00 0.00 0.00 0.15 0.00 0.15
45.15
0.00
0.00
B.
Non performing investments 2010 -11 0.53 0.00 0.00 0.53 0.53
(` in Crore) 2009 -10 0.53 0.00 0.00 0.53 0.53
Particulars Opening balance Additions during the year Reductions during the year Closing balance Total Provisions held
194
39.11 Consolidated Financial Statements: NHB has no subsidiary 39.12 Disclosure on Risk Exposures in Derivatives: a) Qualitative Disclosure The Bank has in-place derivative policy approved by the Board which permits use of derivative products in line with business goals of the Bank. The policy has delegated powers to enter into swaps only at very senior level. Counter party exposure limits are within the overall limits set for each counter party. The credit equivalent of swaps are computed as per current exposure method as prescribed by RBI. The Bank has the necessary infrastructure where the functions are well defined i.e Front Office, Back Office & Mid Office. The position of the swaps is continuously monitored. ALCO reviews the position on a weekly basis; the valuations of the outstanding positions are monitored on a monthly basis. Further, the Board is apprised of the position on a quarterly basis including the valuation of the swaps. The Bank uses financial derivative transactions predominantly for hedging its assets/liabilities and for reducing cost. The Bank currently deals only in plain vanilla over-the-counter (OTC) interest rate and currency derivatives, for managing interest rate risks. The Bank shall use such bench marks where pricing is transparent and that are permitted by RBI. The interest exchanged on the swaps is accounted on an accrual basis. Quantitative Disclosure (` in Crore)
Sl. No. Particulars Currency Derivatives Interest Rate Derivatives
b)
2010-11 1 Derivatives (Notional Principal Amount) a) For hedging b) For trading Marked to Market Position a) Asset (+) b) Liabilities (-) Credit Exposure Likely impact of one percentage change in interest rate (100*PV01) a) on hedging derivatives b) on trading derivatives Maximum and Minimum of 100*PV01 observed during the year a) on hedging - Maximum - Minimum b) on trading - Maximum - Minimum 0.00 0.00 0.00 0.00 0.00
2009-10 0.00 0.00 0.00 0.00 0.00
2010-11 500.00 0.00 0.59 0.00 3.55
2009-10 900.00 0.00 39.34 0.00 48.34
3 4
0.00 0.00
0.00 0.00
1.74 0.00
12.03 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
12.03 1.74 0.00 0.00
16.48 12.03 0.00 0.00
39.13 Exposures where the FI had exceeded the prudential exposure limits during the year: Nil (Previous Year - Nil)
195
39.14 Corporate Debt Restructuring: Nil (Previous Year-Nil) 39.15 Concentration of Deposits, Advances, Exposures and NPAs 1. Concentration of deposits (` in Crore) 2010-11 Total Deposits of twenty largest depositors 61.69 24.81%
Percentage of Deposits of twenty largest depositors to Total Deposits

* Excluding deposits from banks under Rural Housing Fund
2. Concentration of Advances Total Advances to twenty largest borrowers Percentage of Advances to twenty largest borrowers to Total Advances 3. Concentration of Exposures Total Exposure to twenty largest borrowers /customers Percentage of Exposure to twenty largest borrowers/customers to Total Exposure on borrowers/customers 4. Concentration of NPAs Total Exposure to top four NPA Accounts 39.16 Sl. No. 1 2 3 4 39.17 Sector-wise NPAs: Sector Agriculture & Allied activities Industry (Micro & Small, Medium & Large) Services Per sonnel Loan Note: Bank's total exposure is towards housing sector and there is no NPA. Movement of NPAs Percentage of NPAs to Total Advances in that Sector Nil Nil Nil Nil Nil 20,704.42 83.83% 19,549.60 86.57%
(` in Crore) Amount Nil Nil Nil Nil Nil Nil Nil Nil Nil
Particulars Gross NPAs as on 01.07.2010 (Opening Balance) Additions (Fresh NPAs) during the year Sub -total (A) Less: (i) Upgradations (ii) Recoveries (excluding recoveries made from upgraded accounts) (iii) Write -offs Sub -total (B) Gross NPAs as on 30.06.2011 (Closing Balance) (A - B)
196
39.18
Overseas Assets, NPAs and Revenue (` in Crore) Amount Nil Nil Nil
Particulars Total Assets Total NPAs Total Revenue 39.19 Off-balance sheet SPVs sponsored (which are required to be consolidated as per accounting Norms Name of SPV Domestic NIL Schedule I to XV form an integral part of accounts. Signatures on schedules I to XV for identification. Overseas Nil
(` in Crore)
K. N. Kumbhare Regional Manager Vidyadhar K. Pathak Lakshmi Chand
R.K. Pandey General Manager Errol D'Souza Arun Kumar Misra
Directors
As per our attached Report of even date For Aiyar & Co. Chartered Accountants Firm Regn. No. 001174N (C. Chuttani) Partner Membership No. 90723
197
ANNUAL ACCOUNTS 2010-11

(JULY, 2010 TO JUNE, 2011) (SPECIAL FUND)
ANNEXURE

Previous Year ` in crore
61.82 33.43 3.00 194.90 9.73 56.06 1.30 7.61 0.00 11.02 378.87
(Slum Improvement and Balance Sheet Liabilities

Current Year (` in Crore)
61.82 34.95 3.00
1. Special Fund (Slum Improvement and Low Cost Housing Fund) 2. Reserves: (i) Special Reserve in terms of Section 36(1)(viii) of Income Tax Act, 1961 (ii) Investment Fluctuation Reserve 3. Profit & Loss Account: Balance as per last Balance Sheet 204.63 Add: Profit transferred from the Profit and Loss A/c 17.92 4. Current Liabilities and Provisions: (i) Provision for Income Tax 56.79 (ii) Provision for Standard Assets 1.30 (iii) Provision for Bad and Doubtful Debts u/s 36(1)(viia)(c) of Income Tax Act, 1961 8.66 (iv) Provision for diminution in the value of Restructured Accounts 0.02 5. Deferred Tax Liability TOTAL
222.55
66.77 11.57 400.66
Previous Year ` in crore @ 0.00

0.80 1.20 5.80 12.13 19 .93 2.40 9.73 12.13
1. 2. 3. 4. 5. 6.
-
7. 8.
Profit & Loss Account Current Year Expenditure ` in crore Other Expenditure @ Provision for Diminution in the Fair Value of Restructured Accounts 0.02 Provision for Bad and Doubtful Debts u/s 36(1)(viia)(c) of Income Tax Act, 1961 1.05 Deferred Tax 0.55 Provision for Income Tax 6.51 Balance of Profit carried down 19.44 TOTAL 27.57 Transfer to Special Reserve in terms of Section 36(1)(viii) of Income Tax Act, 1961 1.52 Balance carried to Balance Sheet 17.92 TOTAL 19.44
@Amount less than ` 0.50 lakhs
K. N. Kumbhare Regional Manager Vidyadhar K. Pathak Lakshmi Chand
R.K. Pandey General Manager Errol D'Souza Arun Kumar Misra
Directors
200
Low Cost Housing Fund) as at 30th June, 2011 Previous Year Assets ` in crore 1. Cash and Bank Balances: @ (i) Current Account 100.00 (ii) Term Deposit with Banks 2. Investments(at cost or market value whichever is less): 136.40 Treasury Bills 3. Loans & Advance: 102.88 Direct Lending 4. Other Assets: 4.01 (i) Interest Receivable on Bank Deposits 0.69 (ii) Interest Receivable on Investments 20.78 (iii) Advance Tax and TDS 14.11 (iv) Amount Recoverable from General Fund
Current Year ` in crore

@ 50.00
50.00 70.51 142.85
2.45 1.01 77.31 56.53
137.30
378.87 for the year ended 30th June, 2011 Previous Year Rs. in crore
7.58 7.88 3.48 0.99 @ 0.00 19.93 12.13
TOTAL
400.66 Current Year Rs. in crore

7.82 4.58
Income
1. Interest on Loans and Advances and Bank Deposits : (i) Loans and Advances (ii) Bank Deposits 2. Income from Investments 3. Profit on purchase and sale of Mutual Funds 4. Other Income 5. Provisions no longer required written back TOTAL 6. Balance of Profit brought down
12.40 8.73 0.66 0.00 5.78 27.57 19.44
12.13 @Amount less than ` 0.50 lakhs
TOTAL
19.44
Notes forming part of Accounts 1. Balance Sheet and Profit & Loss Account of Special Fund have been drawn in accordance with the provisions of National Housing Bank (Slum Improvement and Low Cost Housing Fund) Regulation, 1993. 2. NHB (Slum Improvement and Low Cost Housing Fund) represent 40% of the amounts deposited by any person voluntarily in accordance with the NHB Voluntary Deposit Scheme (VDS). 3. The Bank does not charge staff expense or other operating expense to Special Fund Account As per our attached Report of even date For Aiyar & Co. Chartered Accountants Firm Regn. No. 001174N (C. Chuttani) Partner Membership No. 90723
201
Senior Executives of National Housing Bank
R.S. Garg Executive Director
V.K. Badami General Manager
R.K. Pandey General Manager
202

National Housing Bank Annual Report 2010-2011

Загружено:

Сведения о документе

Исходное описание:

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

National Housing Bank Annual Report 2010-2011

Загружено:

Авторское право:

Доступные форматы

website : w w w.nhb.org.

National Housing Bank

Annual Report 2010-2011

vkj- oh- oekZ

v/;{k ,oa izcU/k funs'kd

NATIONAL HOUSING BANK

jk"Vh; vkokl cSad

(R.V. Verma) Encls: Annual Accounts in bilingual format

Hkkjrh; fjtoZ cSad ds laiw.kZ LokfeRo esa

^^cSad fgUnh esa i=kpkj dk Lokxr djrk gS**

vkj- oh- oekZ

v/;{k ,oa izcU/k funs'kd

NATIONAL HOUSING BANK

jk"Vh; vkokl cSad

(R.V. Verma) Encls: Annual Accounts in bilingual format

Hkkjrh; fjtoZ cSad ds laiw.kZ LokfeRo esa

^^cSad fgUnh esa i=kpkj dk Lokxr djrk gS**

Directors Appointed under Section 6 (1) (b) of NHB Act, 1987

Directors Appointed under Section 6 (1) (c) of NHB Act, 1987

Dr. Errol D'Souza

Directors Appointed under Section 6 (1) (d) of NHB Act, 1987

Directors Appointed under Section 6 (1) (e) of NHB Act, 1987

Arun Kumar Misra

Alok Nigam Sanjay Kumar Rakesh

Directors Appointed under Section 6 (1) (f) of NHB Act, 1987

okf"kZd fjiksZV 2010&11

ANNUAL REPORT 2010-11

Management of National Housing Bank

Executive Committee of Directors

Audit Committee of the Board

Section 6(1) (c)

Section 6(1) (d)

Section 6(1) (e)

Section 6(1) (f)

VII. VIII. IX.

XIII. XIV. XV. XVI.

okf"kZd fjiksZV 2010&11

ANNUAL REPORT 2010-11

CPs CRISIL CRMC CRR CSO DARPG

AGM AIMA ALCO AML APUHF ASSOCHAM

DR Site EC ED EWS FDI FICCI

BCP BE BIRD CAB CAGR CBFIs CBI CEOs CERSAI

CMD CoR CPGRAMS

okf"kZd fjiksZV 2010&11

ANNUAL REPORT 2010-11

okf"kZd fjiksZV 2010&11

ANNUAL REPORT 2010-11

SLBC SLCC UN UNESCAP

UT VCS WAN WEO WHD WPI ZCB

SBI SCBs SEBI

okf"kZd fjiksZV 2010&11

ANNUAL REPORT 2010-11

Table I Table II Table III Table IV Table V Table VI Table VII

Owning a House, Dream of Millions of People

The Bank has adopted its Vision

inclusive expansion with stability in the housing finance

of all segments of the population with focus on low and moderate

okf"kZd fjiksZV 2010&11

ANNUAL REPORT 2010-11

2009 2010 2011

Net Owned Funds 1999

2.62 3.15 3.21 18 20 21

okf"kZd fjiksZV 2010&11