Enquiry Form

Blogs

Regulatory Reporting for Housing Finance Companies

Updated On : january 2018

Financial regulation is a form of regulation or supervision, with certain requirements, restrictions and guidelines which are required to be followed by financial institutions in order to maintain the integrity of the financial system. Regulatory reporting, is necessarily done to ensure compliance in both the private and public sectors. Depending on the type of reporting, it can be managed either internally or externally by regulatory bodies.

The objectives of financial regulators are usually to

Banks have a vast branch network throughout the country and have a very crucial position in the financial system. Thus they play a major part in providing credit to the housing sector.

Complying with the aims of the National Housing Finance Policy of the Central Government, RBI had introduced a scheme of Housing Finance Allocation where it was required for banks every year to achieve the prescribed target of 'Housing Finance' announced annually.

Banks, on the other hand, have to also follow the RBI guidelines while formulating their policies, and make sure that bank credit is used for production and construction activities and not for any activities connected with speculation in real estate.

The Reserve Bank of India (RBI) regulates bank lending to housing and the National Housing Bank (NHB) regulates lending to housing by Housing Finance Companies or HFCs. Some of the regulations imposed by the RBI on banks also impact HFCs indirectly - such as priority sector lending targets.

NHB is an apex level financial institution catering to the needs of the housing sector in the country. It was established on July 9, 1988. It works towards promoting housing finance institutions or providing assistance to other similar institutions. As per the National Housing Bank Act of 1987, the National Housing Bank is authorised to control the housing finance system of the country, and look after its wellbeing by remove any deterrent that hampers the interest of depositors or is unfavourable to the interest of the housing finance institutions in general. It provides finances for housing loans and project loads to different primary lenders. The NHB also provides loans and financial assistance to scheduled banks and housing finance institutions or to any authority established by or under any Central, State or Provincial Act.

There are certain guidelines for participating in the equity of housing finance companies. NHB also has the promotional role of issuing these guidelines and guaranteeing the bonds to be issued by the housing finance companies. Besides the lending operations, NHB has a dedicated Training Division which conducts regular training programs in areas relating to housing and housing finance for development of management capabilities of officials working in the financial sector.

NBH's regulatory role is one of its most important functions. This role gains more significance as the housing finance system in India enters a secondary phase of development in terms of integration with the debt and capital markets. The case for regulation also rises from the need for credible and stable housing finance system in the country. Keeping the free market approach unhindered, NHB has attempted to put in place an effective system of responsive regulation.

The housing finance system is in the nascent stage in the country and therefore it is necessary to have a great deal of stability in terms of resource development, policy development and institution building. NHB has come up with a set of guidelines for recognising Housing Finance companies (HFCs) for its financial assistance, guidelines for financial assistance. Moreover, it has also released guidelines for prudential norms for income recognition, asset classification etc. NHB also has the task of regulating deposits taking activity, of the housing finance companies. In terms of section 29A of the National Housing Bank Act, 1987 it is compulsory for each of the housing finance companies to obtain a registration certificate from NHB before starting of any business relating to housing finance.

It has been estimated that the housing requirements till 2012 in India is around 74 million units out of which nearly 90% of the total housing units in both the rural and urban areas are for the poor and low income segment households. Though the growth of housing finance is about 30% in the last few years it has not been able to satisfy the requirements of the poor sections of the society. So the NHB not only needs to develop a new financial architecture but also policy and regulatory framework for affordable housing on sustainable lines for the weaker sections of the society. The recent initiatives taken in this direction include interest subsidy scheme for urban poor, top up loan scheme, emphasis on public private partnership focussing on housing for poor, JNNURM for bringing appropriate policy and legal reforms for providing affordable housing to poor.

So for all these to materialize, synchronization is needed between the Government, Reserve bank of India (RBI) and NHB. Entities like public agencies, financial institutions and builders also should be incentivised so that NHB can go ahead and reach its goals.

Leave Comments :

CLIENT SPEAK

  • The Meticulousness of efforts to ensure customer delight by each of the team member during the course of the project is appreciable. - Data Archival Project

    R. Ganesh (Senior Manager)

    Indian Overseas Bank
  • Overall we are happy with the services provided by Nelito. The implementation team is sensitive to our support requirements and does a good job.

    Vinayak Khadye (Chief Digital Officer)

    Finanzmart Services Pvt Ltd
  • We are extremely thankful to the whole team who have devotedly committed and created this excellent database. Much of our time was wasted in data retrieval from i link where we were facing lots of issues.

    You have given us an awesome product which is superior to our Finacle itself in its display capabilities. The great idea of taking pdf/word/excel option is simply superb. Merging the party code and Finacle CIF and account numbers are another feather in the cap.

    N Sampath Kumar (Branch Manager)

    Corporation Bank
  • We have successfully made Nelito's Fincraft Software for NBFC live in early March for LOS,LMS and Sanjiv Khalkho, Arijit Chakraborty with his team have been very instrumental in making this software live . I would like to appreciate on the turnaround time during the go live phase of the team in getting some of our key requirements done and helping our users to use the software for recording and disbursing all the sales from the software.

    In technology side I would like to praise Pramod Navale and Ganesh Khetmalis for in depth knowledge of the product and their technical skills is outstanding. Looking forward for the continued relationship for our next release and whole of 2018.

    Prateek P Katyal (CTO)

    WheelsEMI Pvt. Ltd
  • "We are extremely pleased with the kind of support extended by you and your team for our year end work. Although whole bunch of people worked for making the support seamless from your end, my special thanks to following resources. Anurag, Arpit, Arvind, Pranit, Suraj, Udgran, Nilesh, Leena and Udgrand. Also, thanks to all others who have supported us directly or indirectly at your end."

    Ananda Padebettu (IT Manager)

    The Nav Jeevan Co-op Bank Ltd.
  • "Nelito has Good knowledge of industry. Good customer orientation. They were Flexible and Open to new ideas and suggestions."

    Mr. Ratheesh K. Bharathan | Exec. Vice President & Co- Founder

    WheelsEMI PVT. LTD.
  • "For a Bank of our size, this system suffices and is very cost effective. Almost all of the bank’s activities run on the one system. Nelito constitutes a partner more than a supplier and the relationship includes provision of the bank’s underlying technology as well as its Fincraft range of applications."

    Chairman

    The Nainital Bank Ltd.
  • "The best mix of functionality and technological support and our vision of “Cash Less and Paper Less” work environment for Sonata has come true with our technological partner Nelito. I highly recommend FinCraft Core Microfinance platform and especially integrations with a number of third party services."

    IT Head

    Sonata Finance Pvt. Ltd.
  • "Nelito has successfully deployed the Online Reporting and Management Information System (ORMIS), which has streamlined the reporting process and their analysis. Its team is responsive, provided satisfactory support and has sound expertise to deliver time sensitive & critical projects. Exemplary team work."

    Deputy General Manager (IT Department)

    National Housing Bank
  • CBS

    "We are happy to use FinCraft Data Archival & Retrieval solution from Nelito Systems; it has given huge ROI in terms of saving revenue by retiring legacy applications. We get all desired reports in a timely manner from the solution."

    Assistant General Manager (CBS)

    United Bank of India
  • CBS

    "Nelito is known for its exemplary services to the users at all times. Your team provides excellent service and they are pro-active in providing solutions."

    Chief Manager (SWIFT)

    Indian Overseas Bank
  • CBS

    "On the whole a professional and capable and competent team. Providing solutions adapted to clientele updated on technology front."

    Principal secretary Department of Labour

    Govt. of Sikkim
  • Custom Application Development testimonial

    "Proactive & professionally supportive, technically skilled team."

    General Manager

    Federal Bank
  • CBS

    "Fincraft CBS software & Doorstep Banking Solution helps our society’s functionality towards digitalization & paperless working. It reduces our manpower requirement and workload, also gives us fast reporting for our institution as and when required."

    Chairman

    Mahavir credit coop society
  • CBS

    Exemplary relationship set by Nelito’s PCS team which helps project to grow vertically. We have always been very impressed with the quality of service we have received from Nelito. They are reliable efficient professional and above all truthful. This alone sets them out from much of their competition.

    Project Director

    TCS
  • CBS

    "E-district Manipur project was undertaken and successfully implemented by Nelito in a record time. The online services offered under this project has made a marked difference in the quality of life of the citizens and is taking the state towards a digital Manipur."

    Additional Director (IT)

    Govt. of Manipur
  • DGM

    "On 20th of November 2016 our bank data was migrated to FinCraft and we have completed one year successfully in FinCraft. So we thank all the team members of both IFTAS and Nelito for your great co-operation in this success. We expect more & more co-operation in implementing new technologies in banking sector from your side in future."

    M V Kumar | CEO

    Kempegowda Bank
  • DGM

    "My bank is working with Nelito from the last about 9 Years and the services provided by the company may prolong our association."

    Sikander Gupta | CEO

    The Jammu Central Co-op Bank Ltd.
  • DGM

    "The Bank is associated with M/S Nelito since 2002. M/S Nelito Systems Ltd has been our CBS vendor since 2009. The Products, quality of service offered by them are excellent. They have a very good support team and are trained enough for handling any type of situation."

    D K Kandpal | Vice President (IT)

    Nainital Bank
  • DGM

    "We appreciate your local team who continuously supported & assisted our team to meet the goal."

    Nagendra Nath Sinha | Principal Secretary IT

    Government of Jharkhand, Ranchi
  • DGM

    "Knowledge and service provided to the bank is beyond expectation. And we would definitely engage and recommend solution to others."

    Rachelle F. Rivas | IT Project Manager (Senior Manager)

    Bank of the Philippine Islands (BPI)
  • DGM

    "As Vendor strict adherence to process & procedures. Risk Mitigates in Place. Flexible to customer requirements."

    Dinesh Negi | VP (Clg)

    DCB Bank Ltd
  • DGM

    "Bank has implemented CBS of Nelito Ltd in the year 2008-09 in phase manner. Also integrated RTGS/NEFT, CTS, MMS etc. which help us in smooth automation of banking operation."

    K.T. Wadia | CEO

    The Sutex Co-op Bank Ltd
  • DGM

    "Experience during development of Rating Engine Module has been good in the context of commitment to meet timelines & lot of hard work has been put by Nelito's team."

    Ashutosh Satsangi | VP-Operations

    SMERA
  • DGM

    "Everything was successfully implemented and tested. The implementation was professionally done in a very efficient and cooperative manner. Migration was very smooth."

    Frithjof Ramb | Vice President

    SBI- Frankfurt, Germany
  • DGM

    "Nelito and its team has always been supportive and efficient in achieving the tasks set up by the Dept. Apps developed by the software engineers for the Public Health Dept. have proved to be excellent among the top competitors and have been acclaimed for its effective service delivery to the end user at the grass root level which is the foremost object of any Govt. organization. Many thanks for the sincere efforts."

    Sanjay Kamlakar | Under Secretary to GoM

    Government of Maharashtra
  • DGM

    "We appreciate Nelito team who were always on time and responsive to our needs and changing ideas. They worked efficiently from the project inception to its completion in a timely and professional manner. Their understanding of this space has been invaluable to the success and launch of 'PMAY CLSS' app."

    Susanta K. Padhi | DGM

    National Housing Bank