A Study on Development of housing loan in the banking
industry
Introduction:
Shelter is basic necessity of life, ranked
behind food and clothing. Fro most people buying a house are a cherished dream.
a home is one is one of the assets whose value
Appreciates over the years and thereby is the
safest investment. The biggest investment most people would make will be in a home.
in addition, the deduction that are available on the purchases of a home .in
addition, the tax deduction that are available
on the purchases of a home are an added
advantage .Buying a home works out cheaper
in the long run .
With
the frerce competition in the housing sector, there is a strong urge in every
individual life, whether rich or poor, to own a home. House is not place of dwelling
alone it also satisfies an individual’s social and psychological needs. House
by itself is not productive asset but investment in housing help in increasing
productivity provision of shelter, thus is closely linked with a county’s overall
socio-economic development
It was
in recognition of the mutually supportive
roles of shelter and development in the mid-eighties following
declaration of 1987 as the international year of shelter for the home less concerted efforts were made in our country to formation
a comprehensive nation housing policy
,encompassing all the elements relevant to shelter development . The most
significant measure taken was to establish Nation Housing Banking (NHB) ON JULY
9,1988 under the apex agency to promote housing finance institutions to
mobilize resources for the housing sector, to provide financial ,technical ,
administrative assistance to housing finance institutions’ as also to regulate their working and to coordinate with all the
agencies with housing.
Housing
Finance and banking industry
Housing
finance overview
Housing
is a significant engine for growth and development of the economy.The growth in
housing and finanace activities in recent years reflect the buyant state of the
housing finanace market in the country.the multiplier effect of investment in
housing has grown over the past years as the prpotion of outstanding housing
loans as percentage of GDP increased from 3.4 percent in 2001 to 7.25 per cent
by 2005.this is quite indicative of the potential that exists if the proportion
of investment in housing in other developed and emerging economies is
considered.
Housing constitutes an important and a
measure of the socio-economic status of people. It is regarded as a critical
sector in terms of policy initiatives and interventions. This is reflected in
the efforts of the government to improve housing and habitat conditions by the
way of financial allocations in the five year plans and fiscal measures related
to housing announced in the union budgets. The reach of the institutional
financial market has been extended to serve the housing sector in different
regions and different segment of the population. the accessibility of housing
finance for people in general has evolved ,developed and improved over the years.
The financing institutions have come to see good value in funding this
component of the economy. with a growing number of players and increased
Competetion,the housing sector is becoming increasingly market-driven.the
sector offers safe and secure residential assets, good business opportunities
for the lending agencies and attractive terms for the borrowers.Overall,the
affordability of housing loans clearly appears to have improved with fast
growing number of borrowers.
This has also partly resulted from higher
levels of disposable income seen among the earners. While the borrower’s
community has thronged the sector, the market has also witnessed change in
lending practices in certain segments to accommodate customer needs, as an
offshoot of increased competition and a buyers market. There is a felt need for
standardization and uniformity in practices in order to improve transparency in
the market and bring the greater efficiency.
No comments:
Post a Comment