 the national housing bank bill, 1987 arrangemenr of clauses chapter i preliminary'=uvik 1 short title, extent and commencement 2 definitioru;  chapter ii arram:rd"md'l' 01' tbil national housing baxj[ oajn) capital 'ncr»cf3 establishment and incorporation of national housini bank 4 capital  chapter iii manag:a:millft of the na'l'lonal housing banx5 management 6 board of directors 7 term or office of chairman, managing director and other directors, s€:rvice conditions, etc 8 disqualifications 9 vacation and resignation of office by directors 10 casual vacancy in the office of chairman or managing director 11 meetings of board 12 executive committee and other committees 13· member of board or committee thereof not to participate in meetings in certain cases  chapter iv business of the national housing bane14 business of the national housing bank 15 borrowings and acceptance of deposits by national housing bank 16, loans in foreign currency 17 power to transfer rights 18 power to acquire rights 19 power to impose conditions for accommodation 20 power to call for repayment before agreed period  cuuns21 national housing bank to have access to recorda 22 validity of loan or advance not to be questioned 23 national housing bank not to grant loans or advanc •• ,ainat its own bonds or debentures 24 power to inspect 25 power to collect credit information 26: power to publish information 27 advisory services  chapter v provisions relating to housing finance institutions recilvdfqdeposits 28 definition of depoliiit 29 chapter v not to apply in certain case& jo nation",l housing bank to regulate or prohibit issue of pr08-pectus or advertisement soliciting deposita of money 31 power of national housing bank to collect information from housing finance insthutions as to deposits and to give directiona 32 duty of housing finance institutions to furnish statements, etc • required by national housing bank 33 powers and duties of auditors 34 inspection 35 deposits not to be solicited by unauthorised persons 36 chapte:r v to override other laws chapter vi  funds, alccounts and audit37 general fund and other funds 38 preparation of balance--sheet, etc, of national housing bank 39 disposal of surplus 40 audit 4:1 returm 4'2 annual report on housing  chapi'er vn miscellaneous43 staff of national housing bank 44 obligation as to fidelity and secrecy 4:5 defects in appointment not to invalidate acts, etc 46 protection of action· taken under the act 4:7 indemnity of directors 48 exemption from tax on income 4:9 penalties  euudi50 offences hy companies 81 cognizance of offences 52 application (if fine 53 bankers' books evidence act 18 of 1891 to apply in relation  nationa~ housing bank 54 liquidation of national housing bank 55 power of the board to make regulations 56 amendment of certain enactments 57 power to re:rrove difficulty the first schedule the second schedule bill to 'tat"blish a bank to be known as the ngtional housing bank to operate as c:& principal agen~ to promote housing finance institutions both elt loccll and regionc:&z levels c:&nd to prouide jinancic:&l c:&nd other arpport to s1ich i1l8tit-utions and f<yr mcltters connected therewith or incidental thereto bb it enacted by parliament in the thirty-eighth year of the republic of india as follows:- chapi'er i preliminary5 1 (1) this act may be called the national housing bank act, 1987 short (z) it extends to the whole of india tiue, extent and com· meneement (3) it shall come into force on such date as the central government may, by notification in the official gazette, appoint, and different dates may bellppointed for different provisions of this act and any reference 10 in any: provision to the colwilencement of this act shall be construed as - reftfnnce ttl the coming into forc'e of that provision z in this act, unless the context otherwise requires,-defini· tions (a) "&am" means the board of directors of the national houling' benk referred td in section 6; i (b) "chairman" means the chairman of the board appointed under section 6; (e) "director" means a director appointed under section 6; (d) "housing finance institution" includes every institution, whether incorporated or n9t, which primarily transacts or has as 5 its principal object, the transacting of the business of providing finance for housing, whether directly or indirectly; (e) "managing director" means the managing director appointed under section 6; u) "national housing bank" means the national housing bank 10 established under section 3; (g) "notification" means a notification published in the official gazette; (h) "prescribed" means prescribed by regulations made under this act; is (i) "reserve bank" means the reserve bank of india constituted under section 3 of the reserve bank of india act 1934; a ot jna m words and expressions uaed herein and not defined but defined in the reserve bank of india act, 1934, shall have the mean- 20 101 lii6 ings respectively assigned to them in that act; 2 of 1934 (k) words and expressions used herein and not defined either in this act or in the reserve bank of india act 1934, but defined in the banking regulation act, 1949, shall have the meanin~ respectively ilssigned to them in the banking regulatton act, 1949 10 of 1141  chaprer iils  establishment of the national housing bank and 'capital thereoli'3 (1) with effect from such dote as the central government may, by notification appoint, there shall be established for the purposes of this act a bank to he known as the national housing bank (2) the national housjn~ bank shall be a body co!"dorate with the 30 name aforesaid having perpetual succession and a columon seal vljith power, subject to the provisions of this act, to acquire, holr3 and dirnose of property and to contract, and may, by that name, sue and be sued eata)) liab %dent and incorporatfonol national housid, ' bank (3) the head office of the national housing bank shl'lll be at bomb;'1y or at such other place as the reserve bank may, by notification, specify 3s (4) the national housing bank mav estsblish offices, branches or arencies at any place in india, and with the previous a-pproval of the reserve bank, by notification, increase the said capital up to five hun-capital 4 the authorised and paid up capital of the national housin~ bank 'shall· be one ,hundred crares, of rupees and shall be subscribed by the 40 reserve bank : provided'that the centraigovernment m!\v in ~nn~l1ltati(')n wtth the ~rve bank,· by 1'h'i~flcati01'l: increase the' nid ~tntai ~p to five tiunc!te(t" mres of nip~·s and the eapital so increased shall aiso ~ subsended 1:;y tlhe reserve bank  chapter nr management of the national housing bank_ 5 (1) the general superintendence, direction and management of the affairs and business of the national housing bank shall vest in the  s board of directors, which shall exercise all powers and do all acts and  things, which may be exercised or done by the national housing bank (2) subject to the provisions of this act, the board, in discharging its functions, shall act on business principles with due regard to public interest 10 (3) subject to the provisions of sub-section (1) and save as otherwiae provided in the regulatioil5 made under this act,-(a) the chairman, if he iii holding offices both as the chainnan 'and the managing director, or (b) the managing director, if the chairman is absent, is shall also have powers of general superintendence, direction and managemlmt of the affairs and business of the national housing bank and lnay also exercise all powers and do all acts and things which may be ~ e:lcerdsed or done by the and shall act on business principles with due regard to public interest 20 m) the managing director shall, in the 'discharge of his powers and 'functions, follow such directions as the chairman may give (5) in the discharge of its functions under this act, the national ~iousing bank shall be guided by such directions in matters of policy  involving public interest as the central government in consultation with , 2s tl1e reserve bank, or the reserve bank, may give in writing 6 ,(1) the 'board of directors of the national housing bank shall board of : cp~ist of the following, namely: -direotori (a) 'a chairman and a managing director: provided that the same person may be appointed as chairman 30 and as managing director; (b) three directors from amongst the experts in the field ot housing, architecture engineering, sociology, finance, law, management and corporate planning or in ,any other field, special knowledge of which is considered useful to the national housing bank; 35 (c) three directors who shall be persons with experience in the working of jnstitution~ involved in providing funds for housing or engaged in housing, development; (d) two directors from out of the directors of the reserve bank; (e) three directors from amongst the officials of the central government; (j) two directors from amongst the officials of the state government   (2) the chairman, the managing director and other directors ex-5 cluamg me wreetors relenec1 to m <:!ause ((i), ·shall be appo~nted by tn central lrovernment in consultatwn wlth the heserve hank and c1lrectors the central li-overnmetlt may, in consultatlon with the reserve hank, termaof office of chair-7 (1) the chairman and the managing director shau hold office for such term, not exceedmg five years and shall recelve such salary and 10 allowances and be governed by such teriiul and conditions of service lui the central government may, in <:aosujtation with the reierve hank, speci1y and £hall be elig!l;>le for re-appointment: 1dild, manaaing director and other provided that the chairman or, as the cale may be, the manaaij;l& director shall, notwlthitandmg the expirat!on of hl' tlirm, oontinu w ii hold olliee until rna liucceslior enten upon hia office director~ lervico condi-uods, etc (2) the directors referred to in clauses (0) and (c) of aub-iection (l) of sec lon 6 shall hold office for a term of three years: provided that any such director shall, notwithstanding the expiration of his term, cont!nue to hold office until his succeasor enters upon hi8 lo office (3) the central government may, in consultation with the reserve bank, remove the chairman or the managing director, or any other director referred to in sub-section (2), at any time before the expiry of hi! term of office after giving him a reasonable opportunity of showing 25 cause against the proposed removal (4) notwithstanding anything contained in sub-sections (1) and (3), the central government, in consultation with the reserve bank, shall have the right to tenninate the term of office of the chairman or, as the case may be, the managing director, at any time before the expiry 01 30 lhe term specified under 8ub-section (1), by giving him notice of not less than three months in writing or three months' salary and allowancel in lieu thereof and the chairman or the managing director as the cbh rnay be, shall also have the right to relinqui8h his office at any time before the expiry of the term specified under sub-section (1), by giving 3' to the central <rl>vernment notice of not less than three month8 in writing or three monthe' salary and allowances in lieu thereof (5) the directors shall be paid such fees and allowances as may be prescribed for attending the meetings of the board or of any of its committees and for attending to any other work of the national housing 40 bank: provided that no such fee shall be payable to any director, who 18 in official of the government or a director of the reserve bank 8 no person shall be a director of the board if he-disquall fk:atiodi (a) is, or becomes of unsound mind and has been so declared by 4s - competent court; or (b) is or has been convicted of any offence which in the opinion of the central government, involves moral turpitude; or (c) is, or at any time has been, adjudicated as insolvent or has iuspended payment of his debts or has compounded with his credi-5 tors; or (d) has, for any reason, been removed or dismissed from the service of-(i) the government, or (ii) the reserve bank; the state bank or any other bank, or 10 (iii) any public financial institution, or state financial corporation, or (iv) any other corporation owned or controlled by the government 9 (1) if a director--(a) becomes subject to any of the disqualiilcations mentioned in section 8; or (b) is absent without leave of the board for three or more consecuti ve meetngs thereof, vacation iil1d resignation of office by derectors hi~ seat shall thereupon become vacant 20 (2) any director may resign his office by giving notice thereof in writing to the authority that appointed or, ao the case way be, nominated him and his resignation being accepted by such authority or if his resignation is not sooner accepted, on the expiry of three months from the receipt thereof by such appointing authority, he shall be deemed 25 to have vacated his office 10 if the chairman, or as the case may be, the managing director, is by infirmily or otherwise rendered incapable of carrying out his duties 0r is absent on leave or otherwise, in circumstances not involving the vacation of his appointment, the central government may, appoint 30 another person to act in his place during his absence casual vacancy in the oftlce of chairmanor managiq director meetinp of board 11 (1) the board shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings, as may be prescribed (2) the chairman, or, if for any reason he is unable to attend a meeting 35 of the board, the managing director, or, in the event of both the chairman and the managing director being unable to attend a meeting, any other director nominated by the chairman in this behalf and in the absence of such nomination, any director elected by the directors present hom among themselves at the meeting, shall preside at the meet-40 ing (3) all questions which come up before any meeting of the board shall be decided by a majority of votes of the directors present and voting, and in the event of an equality of votes, the chairman, or, in his absence, the person presiding, shall have a second or casting vote 12 (1) the board may constitute an executive committee consisting of such number of directors as may be prescribed (2) the executive committee shall discharge such functions as may be prescribed, or, as may be delegated to it, by the board executive committee and other commit· tees (3) the board may constitute such other committees, whether con- 5 sisting wholly of directors or wholly of other persons or partly of directors and partly of other persons as it thinks fit for such purposes, as it may decide and any committee so constituted shall discharge such function& as may be delegated to it by the board (4) the executive committee or any other committees constituted 10 under this section shall meet at such times and places and shall observe such rules of procedure in regard to transaction of business at its meetings, as may be prescribed 13 any director of the board or any member of a committee, who has any direct or indirect pecuniary interest in any matter corning up for 15 consideration at a meeting of the board or a committee thereof, shall, as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and the disclosure shall be recorded in the minutes of the board, or the committee, as the case may be, and the director or member shall not take any part 20 in any deliberation or decision of the board or the committee with respect to that matter member of board of comdttee thereof not to participate in meetings incertain cases  chapter iv business of the national housing bank14 subject to the provisions of this act, the national housing bank 25 may transact all or any of the foll:>wing kinds of business, namely:-business ofltlie national housing bank (a) promoting, esteblishing, supporting or aiding in the promotion, establishment and support of housing finance institutions; (b) making of loans and advances or rendering any other form of financial assistance whatsoever to housing finance institutions 30 and scheduled banks; (c) subscribing to or purchasing stocks, shares, bonds, debentures and securities of every other description; (d) guaranteeing the financial obligations of housing finance institutions and underwriting the issue of stocks, shares, bonds, deben- 35 tures and securities of every other description of housing finance , institutions; __  rt - ---(e) drawing, accepting, discounting or rediscounting, buying or selling and dealing in bills of exchange, promissory notes, bonds, debentures, hundies, coupons and other instruments by whatever 40 name called; (1) forming, promoting and managing subsidiaries for carryinj out all or any of its functions under this act; (g) undertaking research and surveys on construction techni ques and other studies relating to or connected with shelter, housing and human settlement (h) formulating one or more schemes, for the purpose of mobi-5 lisation of resources and extension of credit for housing; (i) formulating one or more schemes for the ~nomically weaker sections of society which may be subsidised by the central government or any state government or any other source; (j) organising training programmes, seminars and symposia 10 on matters relating to housing; (k) providing guidelines to the housing finance institutions to ensure their growth on sound lines; (1) providing technical and administrative assistance to housing finance institutions; 15 (m) co-ordinating with the life insurance corporation of india, the unit trust of india, the general insurance corporation of india and other financial institutions, in the discharge of its overall functions: (n) exercising all powers and functions in the performance of 20 duties entrusted to the national housing bank under this act or under any other law for the time being il} force; (0) acting as agent of the central government, the state government or the reserve bank or of any authority as may be autho,rised by the reserve bank; 25 (p) any other kind of business which the central government may, on the re~ommendation of the reserve bank, authorise; (q) generally, doing of all such matters and things as may be incidental to or consequential upon the exercise of its powers or the discharge of its duties under this act 30 15, (1) the national housing bank may, for the purpose of carrying out its functions under this act-(a)' issue and sell bonds and debentures with or without the guarantee of the central government, in such manner and on such terms as may be prescribed, 35 borrowingsand accep_ tance of deposits bynational housin, bank (b)' borrdw money front the central government and from any other authority or orllanisatiqn fir institution aprovl"d by thatgovernment on fiuch t"l'mo; pn~ ('ondhion" as m":v be a~reed upon; 40 ·(c) accept deposits repayable after the exoirv of a period which shall not be less than twelve months from the date of the makfng of the deposit on such terms as may be j;!enerally or specially be anproved by the re!=erve bank; (d) borrow money from th~ r"serve ban'f{-'(i) repayable on de'!l'1nnrl nr nl1 the ~')(pirv of f1~  o n","!n"s not exceeding eighte"l1 mnnths fr0ty'1 the flatp (-,f the ltl"kint1' or loan or advance, on such terms and conditions tneiudfn~ the terms relating to security and purpose as may be specified by the reserve bank; (ii) out of the national housing credit (long term operations) fund established under section 46d of the reserve bank of india act, 1934 or any of the purposes specified in that section; 5 2 of 193t (e) receive for services rendered, such remuneration, commission, commitment charges, consultancy charges, service charges, royalties, premia, licence fees and any other consideration of whatever description; id reeelve gifts, grants donations or 'benefaetions from govern· 10 ment or any other source (2) the central government may, on a request being made to it by the national housing bank, guarantee the bonds and debentures issued by the national housing bank as to the repayment of principal and the payment of interest at such rate as may be fixed by that government 15 46 of 1973 loans in ton;jgn; curfedc,- 16 (1) notwithstanding anything contained in the foreign exchange regulation act, 1973 or in any other law for the time being in force relating to foreign exchange, the national housing bank may, for the purpose of making loans and advances under this act, borrow in such manner and on such co'nditions as may be prescribed in consultation with 20 the reserve bank and with the previous approval of the central government, foreign currency from any bank or financial institution in india or elsewhere '(2) the central government may where necessary, guarantee any loan taken by the national housin~ bank under sub-iilectlon (1) or any 25 part thereof as to the repayment of pricipal and the payment of interest and other incidental charges, ' (3) all loans and advances made by the national housing bank out of foreign currency borroweo under sub-section (1) shal~ be expressed in terms of foreign currency as equivalent of indian currency, cslcu- 30 lated in accqrdance with the rate of exchang-e prevailing: at the time of ~ant thereof, and the amount due thereunder shall be repayable in equivalent indian currencv calculated in accordance with the rate of exchange prevailin~ at the time of repavment of such loan or advance (4) any loss or profit in connection with any borrowing- of forei$l 3'5 currency under sub-section (1) or with its repayment on account of any fluctuation: in th~ rate of exchange accruing-' '(a) during the period within wh5ch th" l!)an nr arivance is repayable by the housinrr finan('e institution or the ]1eriod of actual repayment thereof bv the said housinf! finance institution whichever is 40 longer, shall be reimbursed by, or paid tn, l'is the ca!'le may ·be, the housin~ fin~"'-('e institlltiot1 of ~1"'h loans nnd advances; (b) after th~ expirv nf the period spedfled ion clallse" (a),-m sh~l1 be' b(')rne bv the nati(')nal housinlz bank in respect of normal m~rjret, flllctljatit)l'is in foreign exchange: 4~ (ii) shall 00 relmlmnleil by 01' paid to as the ~a:'!e may be, the central {'wovernment in resnect of fluctuation other th  n the nonnal market fluctuations in foreign exchange explanation-if any question arises as to whether any fluctuation is a normal market fluctuation or not, the same shall be decided by the central government whose decision thereon shall be final | power    ||----------|| transfer || rights  |17 the rights and interests of the national housing bank (including 5 any other rights incidental thereto) in relation to any loan or advance made, or any amount recoverable, by it, may be transferred by the national housing bank, either in whole or in part, by the execu~ion or issue of any instrument or by the transfer of any instrument by endorsement, or in any other manner in which the rights and interests in relation 10 to such loan or advance may be lawfully transferred, and the national housing bank may, notwithstanding such transfer, act as the trustee 2 of 1882 within the meaning of section 3 of the indian trusts act, 1882, for the transferee power to acquire ri::hts 18 the national housing bank shall have the right to acquire, by 15 transfer or assignment, the rights and interests of any housing finance institution (including any other rights incidental thereto) in relation to any loan or advance made, or anv amount recoverable by such institution, either in whole or in part by the execution or issue of any instrument or by the transfer of any instrument or in any other manner in which 20 tlie rights and interests in relation to such loan or advance may be lawfully transferred power to impose conditions for 19 in entering into any transaction under this chapter with anv borrowing housing finance institution, the national housing bank may  ~ impose such conditions as it may think necessar" or expedient fo,r pro-25 tecting the interests of the national housing bank accc)-modation 20 notwithstandin~ ::tnvthincr to the contrarv contained in any agreement, the national housing bank may by notice in w:ritjn~, require any borrowing housin/! fimmce :nstitutioo to dh;~harge forthwith in full its liabilities to the national housin'" bank-, f> | power    | to    ||----------|-------|| call     | for   || repay-   |       || ment     |       || before   |       || agreed   |       || period   |       |30 (a) if it appears to the board that false 01' misleadin~ information in any material particular was given in the application for the loan or advance; or ' (b) if the borrowing housing finance institutinn has faileo t,, comply with anv of the tet'ins of the agreement with the national 35 housing bank in the matter of the loan or advance; 01' (c)' if there is a reasonable apprehension that the borrowin~ housing finance institution is unable to pay its debts or that proceedings for hquidation m8:-,' he commenced in respect thereof; or (d) if for any reason, it is necessary so to do to protect the 40 interest!; of the national housing bank national housing bank to have access to reco)'ds 21 (1) the national housin~ bank shall have free access to all such records of any housing finance institution which seeks to avail of anv credit facilities from the national housing bank and to all such recol'ds of any person who seeks t,, avail of any credit facilities from such housing 45 finance institution, the perusal of which may anpear to the national housing bank to be necessary in connection with the p"ovidin<r of financp or other assistance to such housinr: finance institution or tl1e refinllncing of any l(')an or advance made to such person by that housing flnance institution -i (2) the national housing bank may require any institution or person referred to in sub-section (1), to furnish to it copies of any of the records referred to in that sub-section and the institution or the person, as the case may be, shall be bound to comply with such requisition validity of loan orad vance not to be quei-tioned 22 notwithstanding anything to the contrary contained in any other 5 law for the time being in force, the validity of any loan or advance made by the national housing bank in pursuance of the provisions of this act shall not be called in question merely on the ground of non-compliance with the requirements of such other law or of any resolution, contract, or any instrument regulating the constitution of the borrowing housing 10 finance institution: provided that nothing in this section shall enable any company or co-operative society to obtain any loan or advance where the instrum~nt relating to the constitution of such company or co-operative society does not empower such company or co-operative society so to do 15 z3 the national housing bank shall not make any loan or advance on the security of its own bonds or debentures na1jl:mal housing bank not to make loans or advances against its own bonds or debent~8 power to inspect 24 (1) the national housing bank may, at any time, and shall on being directed so to do by the reserve bank~ cause an inspection to be made by one or more of its officers of any housing finance institution 20 to which the national housing bank has· made any loan or advance or grallted any other financial assistance, and its books, accounts and other documents; and the national housing bank shall supply to the housing finance institution a copy of its report on such inspection (2) :rt shall be the duty of every officer, employee or other person or 25 persons incharge of the whole or part of the affairs of the housing finance institution to produce to any officer making an inspection under sub-section (1), all such books, accounts and other documents in his custody or power and to furnish within such time as the said officer may specify any statements, information relating to the affairs of the housing 30 finance institution as the said officer may require of him power to collect credit lntorma tion 25 (1) the national housing bank may, for the purpose of the efticient discharge of its functions discharge its functions under this act at any time direct any housing finance institution to submit to it credit information in such form and within such time as may be specified by 35 the national housing bank from tir;:te to time (2) ev,ery housing finance institution shal1, notwithstanding anything to the contrary contained in any law for the time being in force or in any instrument regulating the constitution thereof or in any agreement executed by it, relating to the secrecy of its dealings with its constituents, be bound to comply with any directions issued under sub-section (1)  5 (3) the national housing bank may, for the purpose of the efficient discharge of its functions under this act collect from the central and s~ate governments, local authorities, the reserve bank, any bank or such financial or other institutions as the reserve bank may specify in this behalf, credit information or other informat:on lo explanatictn-for the purposes of this section and section 26, credit information means any information relating to-(0 the amount of loans and advances and other credit facilities granted for the purpose of housing; i (ii) the nature of security taken for such loans, advances or 15 other credit facilities; (iii) the guarantees furnished; and (iv) any other information which has a bearing on the creditworthiness of the borrower power to publish information 26 the national housing bank, if it considers it in the public interest 20 so to do, may publish any credit information or other information obtained by it under this act, in such consolidated form or in any other form as it thinks fit advisory services 27 the national housing bank may provide advisory services to the central and state governments local authorities and other agencies 25 connected with housing, in respect of-(a) formulation of overall policies aimed at promoting the growth of housing and housing finance institutions; (b) legislation relating to matters having a bearing on shelter, housing and human settlement - i  30 chapter v provisions relating to housing finance institutions receiving deposits28 in this chapter the term 'deposit' shall have the meaning assigned to it in section 451 of the reserve bank of india act 1934 , defini lion of deposit 35 29 (1) the provisions of this chapter shall not apply to deposits accepted by a housing finance institution which is a firm or an unincorporated association of individuals c~apter not to apply in certain cases (2) for the removal of doubts, it is hereby declared that the firms and unincorporated ass<>ciations of individuals referred to in subsection 40 (1) shall continue to be governed by the provisions of chapter iiic of the reserve bank of india act, 1934 30 the national housing bank may, if it considers necessary in the pub:ic interest so to do, by general or special order,-(a) regulate or prohibit the issue by any housing finance institution of any prospectus or advertisement soliciting deposits ot money from the public; and s (b) specify the conditions subject to which any such prospectus or advertisement, if not prohibited, may be issued national housiq bank to reau late or prohibit issue of prospectus or advertisement soliciting deposits of money 31_ (1) the national housing bank may at any time direct that every housing finance institution accepting deposits shall furnish to th8 national housing bank in such form at such intervals and within such 10 time, such statements, information or particulars relating to or connected with deposits received by the housing finance institution as may be specified by the national housing bank by general or special order (2) without prejudice to the generality of the power vested in the national housing bank under sub-section (1), the statements, informa- 15 tion or particulars to be furnished under sub-section (1), may relate to all or any of the following matters, namely the amount of the deposits the purposes and periods for which and the rates of interest and other terms and conditions on which, such deposits are received power of national housing bank to collect l'nformation from housinl fidadce institutions as to deposits and to give directions (3) the national housing bank may, if it considers necessary in the public interest so to do give directions to housing finance institutions 20 accepting deposits either generally or to any group of housing finance institutions accepting deposits, and in particular, in respect of any matters relating to, or connected with, the receipt of deposits including the rates of interest payable on such deposits, and the periods for which 2s deposits may be received '  (4) if any housing finance institution, accepting deposi~ fails to compi)' with any direction given by the national housing bank, under sub-section (3) the national housing bank may prohibit the acceptance of del dsits by that housing finance institution (5) every housing finance institution, receiving deposits, shall, if so required by the national housing bank and within such time as the national housing bank may specify, cause to be sent at the cost of the housing finance institution a copy of its annual balance sheet and profit and loss account or other annual accounts to every person from whom 3s the housing finance institution holds, as on the last day of the year to which the accounts relate, deposits higher than such sum as may be specified by the national housing bank 32 every housing finance institution shall furnish the statements, information or particulars called for, in such form as may be prescribed and to comply with any direction given to it, under the provisions of this chapter, | duty      | oj    ||-----------|-------|| housli'n" |       || finance   |       || institu-  |       || tions     | to    || furnish   |       || state-    |       || ments    |       || etc     | reo   || quired    |       || by        |       || nu       |       || tiional   |       || housing   |       || bank     |       || powers    |       || and       |       || duties    | of    || auditors |       |5 33 (1) the audi,tor of every housing finance institution ~hal1 enquire whether or not the' housing finance institution has furnished to the national housing bank such statements, information or particulars relating to or connected with deposits received iby it, as are required to be furnished under this chapter, and the auditor shall, except  10 where he is satisfied on such enquiry that the housing finance institution has flu'nished such statements, informations or particulars, make a report to the national housing bank giving the aggregate amount of such deposits held by the housing finance institution, 1 of 1956, (2) wtcre, in the case of a housing finance institution, being a com-15 pany, the auditor has made, or intends to make a report to the ;national housing bank under sub-section (1), he shall include in his report under sub-section (2) of section 227 of the companies act, 1956 the contents of the report which he has made, or intends to make,- to the national housing bank 20 34 (1) the national housing bank may, at any time, cause an inspec-in~pcc· tion to be made by one or more of its officers or employees or other tion persons (hereafter in this section referred to as the inspecting authority) of any housing finance institution accepting deposits, for the purpose of verifying the correctness or comple~eness of any statement, information 25 or particulars furnished to the national housing bank or for the purpose of obtaining any information or particu1ars ,which the housing finance institution has failed to furnish on being called upon to do so (2) it shall ~ the duty of every director or member of any committee or other body or any person for the time being vested with the 30 management of the whole' or part of the affairs of every housing finance institution accepting deposits or other officer or employee thereof to produce to the inspecting authority £,,11 such books, accounts and other documents in his custody or power and to furnish that authority with any statement and information relating to the business of the 35 institution as that authority may require of him, within such time as ,may be specified by that authority (3) the inspecting authority may examine on oath any director or member of any committee or body or any other person for the time being vested with the management of the affairs of the housing finanf!e 40 instituti<m accepting deposits, or any officer or employee thereof' in relation to its business as no person shall solicit on behalf of any housing finance institution either by publishing or causing to be published any pro~pectus or advertisement or in any other manner deposits of money from the public unless-deposits not to be solicited by unauthorised persons (a) he has been authorised in writing by the said housing 5 finance institution to do so and specifies the name of the institution which has so authorised him; and (b) the prospectus or advertisement complies with any order i made by the national housing bank under section 3q and with any other provision of law for the time being in force applicable ·to the 10 pubjication of such prospectus or advertisement 38 the provisions of this chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any iluch lavv 15 chapter vto override other laws  chapter vi funds, accounts and auditgeneral fund and other funds 37 (1) with effect from such date as the reserve bank may specify, the national housing bank shall establish a fund to be called the general fund and all payments by the national housing bank shan be made out 20 of the said general fund  (2) the board may, lll1d shall, if so directed by the reserve bank, create a special fund or a reserve fund or such other funds as may be prescribed 38 (1) the balance sheet and accounts of' the national housing 25 bank sha!l be prepared and maintained in such form and manner as may be prescribed  , (2) the board shall cause the books and accounts of the national housi ng bank t::> be balanced and closed as on the thirtieth day of june, each year 30 preparation of balance sheet, etc of national housing bank d'spollal of surplus 31 after making provision for bad and doubtful debts, depreciation of assets and all other matters for which provision is necessary or expedient or which is usual1y provided for by bankers, the national housing bank shall !tansfer-(i) for a period of fifteen years, following the accounting year 3s during which the national housing bank is established, the amount remaining (hereafter in this section referred to as surplus) such of the funds referred to in section 37 as the reserve bank may specify, and  (it) after the expiry of the said period of fifteen years the ~ }ifational housing bank shall after making provision for the fundi referred to in sf!ction 37 transfer the balance of rurplus to the reserve bank 40 (1) the accounts of the national housing bank shall be audited audil by auditors duly qualified to act as auditors under sub-section (1) of 1 of !9s6 section 226 of the companies act, 1956, who shall be appointed by the reserve bank, for such tenn and on such· remuneration as the reserve 5 bank may fix  (2) the auditors shall ·be supplied with a copy of the annual balancesheet of the national housing bank and it shall be their duty to examine it together with the accounts and vouchers relating thereto and they shall have a list d~livered to them of all books kept by the national 10 housing bank and shall at all reasonable times have access to the boob, accounts, vouchers and otner documents of the national housing bank (3) the auditors may, in relation to the accounts of the national housing bank, examine any director of the board or any oftlcer or other employee of the national housing bank and shall be entitled to require j 5 from the board or officers or other employees of the national housing bank such information and explanation as they may think necessary for the performance of their duties (4) the auditors shall make a report to the national housing bank upon the annual balance sheet and accounts examined by them and in 20 every such report, they shall state whether in their opinion the balancesheet is a full and fair balance-sheet containing all necessary particulat's and properly drawn up so as to exhibit a true and fair view of the state of affairs of the national housing bank and in case they had called for any explanation or infonnation from the board or any officer or other 25 employee of the national housing bank, whether it was given and whether it was satisfactory ' (5) the national housing bank shall furnish to the reserve bank within three months from the date on which the annual accounts of the national housing bank are closed and balanced, a copy of its balance-30 sheet as on the close of the relevant year together with a copy of the profit and loss account for the year and a copy of the auditors" report and a report of the working of the national housing bank during that year returns 41 the national housing bank shall furnish, from time to time to 35 tlhe neserve bank such information and returns as the reserve bank may ~·equire annual report on housing 42 the national housing bank shall make an annual report to the reserve bank on the trend and progress of housing in the country and in that report may make such suggestions as it may think nece~ry or expedient for the development of housing 40  chapter vii miscellaneousstaft' or national housing bank - 43 (1) the national hotlsing bank may appoint such number of ofb~ and other' employees as· it considers necessary or desirable for the efficient perl'onnance of its functions and determine the tenrij and  4s conditions of their appointment and service ;  (2) the duties and conduct telvls and conditions of service and the establishment ,and maintenance of provident fund or any other fund for the benefit of the officers and other members of staff of the national housing bank: shall be such as may be prescribed (3) the national housing bank may depute any officer or any mem-5 ber of its staff for such period and on such terms and cohditions as it may determine, to any institution including a housing finance institution (4) nothing contained in this section shall empower the national housing bank: to depute any officer or member of its staff to any inst!- 10 tution on any salary, emoluments or other terms and conditions which is or are less favourable to him than that or those to which he is entitled to immediately befo~e such deputation (5) the national housing bank may, without prejudice to the provisions of section 54aa of the reserve bank of india act, 1934 receive 15 2 of 1934 or take on deputation any officer or other employee from any institution including a housing finance institution for such period and on such terms and conditions as it may think necessary in the in teres: of the national housing bank obligation as to fidelity and ~ecrecy 44 (1) the national housing bank shall not, except as otherwise 20 requh'ed by this act or any other law, divulge any information relating to, or to the affairs of, its constituents except ,in circtjms~ances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the national housing bank to divulge such information 25 (2) every direct')r, member of a committee, auditor, advisor, oircer or other employee of the national housing bank or of the reserve bank, whose services are utilised by the national housing bank under the provisions of this act, shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in' the first schedule to this act 30 45 (~) no act or proceeding of the board or of any committee of the national housing bank shall be questioned on the ground merely on the existence of any vacancy in, or defect in the constitution of, the board or the committee as the case may be ,  35 defects in appolintment not to invalj-date acts, ctc (2) no act done by any person acting in good faith as a director of the board or as a member of a committee of the national housing bank shall become invalid merely on the ground that he was disqualified to le a director or that there was any other defect in his appointment 40 protection of action takea under the act 46 no suit or other legal proceeding shall lie against the national housing bank or any director or any offiee·r or o~er employee of the national housing bank or any other person authorised by the national housing bank to discharge any functions under this act for any loss 5 or damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of thi5 act or of any other law or provision having the force of law indem-~ty of directors, 47 (1) every director shall be indemnified by the national housing bank against all losses and expenses incurred by him in, or in relation 10 to the discharge of his duties, except such as are caused by his own wilful act or default (2) a director shall not be responsible for any other director or for any officer 01' ,other employee of the naticmal housing bonk or for any loss or expenses resulting to the national housing bank from 15 the insufficiency or deficiency of the value of, or title to, any property or secu!'ity acquired or taken on behalf of the national housing bank  or the insolvency or wron~ul act of any debtor or any person under obligation to the national housing bank or anything done in good , faith in the execution of the duties of his office in relation thereto exemption from tax on income  43 of 1961 20 48 notwithstanding anything contained in the income-tax act, 1961, or any other enactment for the time being in force relating to tax on income, profits or gains the national housing bank shall not be liable to pay incom~-tax, or any other tax in respect of its income, profits or  gains derived penalties 25 49 (1) whoever in any return, balance-sheet or other document or in any information required or furnished by or under or for the purp:lses of any provision of this act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprison-30 ment for a term which may extend to three years and shall also be liable to fine (2) if any person fails to produce any book, account or other document, ot to furnish any statement or ~nformation· whioch, under the provisions of this act, it is his duty to produce or furnish, he shah 35 be punishable with fine which may extend to two thousand rupees in respect of each offence and in the case of a continuing failure, with lin additional fine which may extend to one hundred rupees for every day during which the failure continues after conviction for the first such !failure 40 (3) if any per san-(a) receives any deposit /fin contravention of any direction given or order made under chapter v; or (b) issues any prospectus or· advertisement otherwise than in a"cordance with section ·35 or any order made under section 30, as 45 the case may be; he shall be punishable with imprisonment !for a term which may extend to three years and shall also be liable to fine which may extend,-(i) in the case of 18 contravention falling under clause (a), to twice the amount of deposit received; and (ii) in the case of a contravention falling under clause (b), to 5 twice the amount of the deposit called for by the prospectus or advertisement   (4) if any other provision of this act is contravened or if any default is made in compliance with any other requirement of this act, or of any order, regulation, or direction made or given or condition 1_0 imposed thereunder, any person guilty of 'such contravention or default shall be punishable with fine which may extend to two thousand rupees and where a contravention or default is a continuing one with further fine which may extend to one hundred rupees for every day, after the first, during which the contravention or default continues 15 offences bycodlpbni'ca so (1) where an offence has been committed by a company_ every person who, at the time the offence 'was committed, was in· charge of, and was responsible to the company for the conduct of the business of the company, as well as the company,shall be deemed to be guilty of the oftence and shall be liable to be proceeded against and punished 20 accordingly: provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this act, if he proves that the offence was committed without his knowledge or that he had eierdsed all due diligence to prevent the commission of such 25 offence (2) notwithstanding anything contained in sub-section (1), where an offence under this act has been committed by a compan'y and it jg proved that the offence has been committed with the consent or {'~nnivance of, or is attributable to any neglect on the part of any 30 ,jirector manager secretary or other officer of the company, such director manager secretary or other officer shall also be deemed to be <tuilt~, llf that offence and shall be liable to be poceeded against and punished accordingly frplanation-for the purposes of this section-35 (c) "company" means any body corporate and includes a' firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm, cognizance ot offences 51 (1) no court shall take cognizance of any offence punishable 40 under this act except upon a complaint in writing made by an officer of the national housing bank, generally or sp~ially authorised in writing in this behalf by the national housing bank, and n,o {'ourt other than that of a metrouolitan magistrat,e or a judicial mag;st":''lte of the first class or a court superior thereto shall try any such offence 4s (2) notwiuutanding anything contained in th~ code 01 criminal 2 of 1974 procedure, 1973, a magistrate may, if he sees reason so to do, dispense with the personal attendance of the· officer of the national housing bank filing the complaint but the magistrate may in his discretion, at 5 any stage of the proceedings, direct the ~rsonal attendance of the complainant app:ication of fine 52 a court imposing any fine under this act may direct that the whole or any part thereof shall be applied in, or towards payment of, tt,e cost of the proceedings 10 53 the bankers' books evidence act, 1891, shall apply in relation to the national housing bank as if it were a bank as defined in section 2 of that act banker,,' books evidence act, 18 of 1091, to apply ill relation to national housing bank  54 no provision of law relating to the winding up of companies shall 15 apply to the national housing bank and the national housing bank shall not be placed in liquidation save by order of the central government ann in such manner as it may direct liquida· tion of national housing bank 55 (1) the board may, with the previous approval of the refierve bank and in consultation with the central government, by notification, make regulations not inconsistent with this act to provide for all 20 matters for which provision is necessary or expedient for the purpo~e of giving effect to the provisions of this act | power    ||----------|| the      || board    || to       || make     || regula-  || tions   |(2) in particular and without prejudice to the generality of~the foregoing power, such regulations may provide for all or any of the following matters, nal'l1:ely:-(a) the fees and allowances that may be paid to the directors for attending the meetings of the board or its committees under sub-section (5) of section 7; 30 (b)  the times and places at which the board max meet, and the rules of procedure that may be followed in regard to the transaction of business under sub-section (1) of section 11; (c) the number of members that the executive committee may consist, the functions that it may discharge and times and places at which it shall me and the rules of procedure that it may follow in the transaction of business under section 12; 35 (4) the manner and terms of issue and redemption of bonds ani debentures under clause (a) of sub-section (1) of section 15; (e) the manner· in which and the conditions subject to which the national housing bank may borrow in foreign currency under sub-section (1) of section hi; (f) the form in which the statements, information etc is to be furnished under section 32; (g) the special fund, reserve fund and other funds to be created under sub-section (2) of section 37; (h) the form and manner in which the balance-sheet and 5 accounts shall be prepared· and maintained under sub-section (1) of section 38; and (i) the duties and conduct, salaries, allowances and conditions of servi~ of the officers and other members 0f staff of the national housing bank under section 43; ](i (j) the establishment and maintenance of provident fund and any other fund for th~ benefit of officers and other members of staff of the national housing bank under section 43; and (k) any other matter which is to be, or may be, prescribed (3) any regulation which may be made by the board under this act 15 may be made by the reserve bank, in consultation with the central gove~nment, before the expiry of three months from the date of establishment of the national housing bank, and any regulation so made may be altered and rescinded by the board in the exercise of its powers under this act  20 (4) the power to make regulations conferred by this section shall include the power to give retrospective effect to the regulations or any of them from a date not earlier than the date of commencement of this act, but no retrospective effect shall be given to any regulation so as to prejudicially affect the interests of any petson to whom such regulation 25 may be applicable (5) the central government shall cause every regulation made under this act to be laid, as soon as may be after it is made, before each house"of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or' more 30 successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid~ both houses agree in making any modification in the regulation or bo1fu houses agree that the regulat!on should not be made, the regulation shl:!oll thereafter have effect only in such modified form or be of no effect, as the 35 case may be; so, however, that any such modification or annulment shall ue wi1 haut prejudice to the validity of anything previously done under that regulation 56 the uactments specified in the second scheduled to this act shall be amended in the manner provided therein and unless otherwise pro- 40 vided in that schedule such amendments shall take effect on and from the date or establishment of the national housing bank under section 3 amendment of certain enactments 57 if any difficulty arises in giving effect to the provisions of this act the central government may, by order, not inconsistent with the provisions of this ad, remove the difficulty: power to remove diffi· culties provided that no such order shall be made after the expiry of  a period oi three years from the commencement of this act  the first schedule [see section 44 (2)]declaration of fldji:l1ty' and secrl!lcy i,                       do pereby declare that i will iaithfully, s,trully and to the best of my skill and ability execute and perform the duties required of me as director, member of the   committee, auditor, advisor, officer or other employee (as the case may be) of the national housing bank and which properly relate to the office or position held by me in or in relation to the said national hous-10 ing bank i further declare that i will not communicate or allow to be communicated to any person not legally entitled thereto any iniormation relating to the affairs of the national housing bank nor will i allow any such person to inspect or have access to any books or documents 15 belonging to or in the possession of the national housing bank and r'elating to the business of the said national housing bank or the business of any person having any dealing with the said national housing bank (slignature) sign;::!d before me 20  the second schedule (see section 56) amendmenls to certain enactments part i amendments to the reserve bank of india ai:r, 1934 25 (2 of 1934) amendments1 in 'section 2, after clause (ccc), the following clause shall be inserted, namely:-' ! "(ecce) 'national housing 'bank' means the national housing 30 b,,~ established under flection 3 of the national housing ballkact, ~9&7;" ~ 3s 40 ·45 2 in section 11,-(i) after clause (w), the following clause shall be inserted, namely:-"(4dd) the making to the national housing bank of loami and advances and g,eneraliy assisting the national housing bank in such' manner and on such terms as may be determined by the central board;"; (ii) after clause (4g), the following clause shall be inserted, namely:-"(4gg) the making of loans and advances to, and the purchasing of bonds and debentures of, the national housing bank out of the national housing credit (long term operations) fund established under section 46:0;";  (iii) after clause (8a) , the following clause shall be inserted, namely:-"(8aa) the promoting, establishing, supporting or aiding in the pramotion,establishp:lent and support of any financial institution, whether as its subsidiary or otherwise;" 3 in the explanation: to sub-section (1) of section 42 in su~lause (ii) of clause (c), after the words "or from the reconst~ction bank", the words "or from the national housing bank" shall be inserted 4 aftez4 section 46c, the following section shall be inserted, namely:-5 "46d (1) the bank shall establish and maintain a fund 10 be known as the national housing credit (long term operations) fund to which shall be credited every year such sums of money as it may consider necessary (2) the amount in the said fund shall be applied by the bank 10 only to the following objects, namely:-national housinl credit (long term operations) fund (a) the making to the national housing bank of loans a»d advances for the purpose of any business of the national housing bank; (b) the purchasing of bonds and debentures issued by the is national housing bank"  part n amendments to the banlong rl:gulation act, 1949 (10 or iim9) ~20 1 in section 5, after clause (ftc), the following clause shall be insertea, namely:-'(ffd) "national housing bank" means the national housing bank established under section 3 of the national housing bank act, 1987;' 2s 2 in sub-section (1) of section 18, in the, explanation, in sud-clause (ii) of clause (a) ,after the words "or from the reconstruction bank", the words "or from the national housing bank" shall be inserted 3 in section ma, in sub-section (3) after the words "the reconstruction bank", the words "the national housing bank" shall be inserted 30 4 in section 36ad, in sub-section (3), after the word "the reconstruction bank", the words "the national housing bank" shall be inserted 5 in section 56, the clause (1), in the explanation, in sub-clause (ii) of clause (a), after the words "the reconstruction bank", the words "the national housing bank" shall be inserted 35  part iii amendment to the industrial disputfs acr, 1947 (14 of' 1947) amendmentin section 2, in clause (a), after the words "the industrial recons- 40' truction bank of india", the words and figures "the national housing bank e~tab1ished under section 3 of the national housing bank act, 1987" shall be inserted  [see section 44 (2)] declaration' of fidelity and secrecyi,  , do hereby declare that i will faithfully, 5 truly and to the best of my skill and ability execute and perform the duties· required of me as director, member of the   comffiittee, auditor, advisor, officer or other employee (as the case may be) of the national housing bank and which properly relate to the  office or position held by me in or in relation to the said national hou 10 tng bank  part iv amendment to the payment of bonus act, 1965 (21 of 1965) amendment15 in section 32, after sub-clause (f) of clause (ix), the following subclause shall be inserted, namely:-"uf) the national housing bankj" housing is a basic need and serves to ful1il the fundamental objective of providlng shelter the existing institutional framework for providing oubing finance is yet to develop fully it is, therefore, necessary to create a housing finance structure through establishzn~nt of appropriate institu-tions at various levels which would mobilise resources and promote housing activity , ~ 2 a high level group which looked into the problem, reconunended that a national housing bank be established as an apex housing financial institution to function as the principal agency for the promotion of"housing finance institutions at various levels, to co-ordinate the activities of these institutions, to promote modilisation of resources for housing and to extend financial support to the housing finance institutions 3 the bill seeks to provide for the establishment of a national housing bank with a view to giving effect to the aforementioned recommendations of the high level group in addition, the national housing bank will also play a role in the formulation of policies designed to promote housing in the country and provide guide-lines for the working of all the agencies connected with housing 4 the notes on clauses appended to the bill explain the provisions of the bill new delhi; the 20th august, 1987 narayan dati' tiwari,  presidents recommendation under articles 117 and 274 of the constitution of india[copy of letter no 7 (6) /87cp, dated the 21st august, 1987 from shri narayan datt tiwari, minister of finance to the secretary-generai, lok sabhal the president, having been infonned of the subject matter of the propdsed national housing bank bill, 1987, recommends the introduction of the bill in lok sabha under articles 117 (1) and 274 (1) of the constitution and its consideration by lok sabha under article 117 (3) thereof cliause 2 defines the expressions used in the bill clause 3 provides for the establishment of the national housing bank and its offices, branches and agencies clause 4 provides fot the capital of the national housing bank, which will initially be one hundred crores of rupees and the same may be increased up to five hundred crores of rupees by the central government in consultation with the reserve bank the entire capital be subscribed by the reserve bank clauses 5 and 6 provides fot the management of ~ 'national housbg bank and for the vesting of the affairs and businem of that bank in a board of directors the board will have apart from other directors, two directors to be nominated by the reserve bank there will also be a representation from experts in the fteld of housing architecture, engineering, sociology, finance, law, etc clau8es 7, 8 am 9 provide for the term of office of chairman, managing director and other directors and their service conditions, their disqualifications and vacation and resignation of oftice clause 10 provides for the filling up of casual vacancy in the office of the chairman or managfng director clause 11 provides for the meetings of the board and observance of l"ules of procedure in this regard clause 12 provides for the constitution of an executive committee and such other comnilttees for sueb purposes as the board may decide clause 13 pt'ovides that a member of the board or committee not to participa~e in meetings in certain: cases clause 14 gives details of the business to be transacted by the nationa] housing bank the primary re$ponsibility of· the national housing bank will be to promote regional and local level houbing finance institutions with the object of mobilising resources fot' financing housing construction it will , provide capital as also professional expertise and support in the initial years to new institutions to be set up at the local level co-o»dination 'of the activities of the housing finance· institutions and other agencies con-reeted with housing wul be one of its 4nportant functions to provide guarantee and linder-writing facilities to housing finance institutions in keeping with the apex role contempla~ for it would be another activity of the natiol'ull housing bank the national housing bank will  formulate schemes for mobilising resources and extending credit for housing including that for the economically weaker sections of the society which may be supported by subsidies from the central or any of the state government or any other source it will need to maintain c!0;i8 liaison with the life insurance corporation of india unit trust of india, general insurance corporation of india and other financial institutions, which lend significant financiaj support to the existing housing finance institutions the national housing bank will also undertake studies, research and surveys relating to shelter, housing, construction techniques etc, and to provide technical and administrative assistance to housing finance institutions clause 15 enables the national housing bank to borrow from the open market through the issue of bonds and debentures whether guaranteed by the central government or not it also provides for borrowings from the central government and other institutions approved by that government and to accept deposits of long-term duration besides, it wu1 be entitled to short-term accommodation from the reserve bank it can also avall of long-term loans out of the national housing credit (long term operations) fund to be established by the reserve  bank, for the purpose of any business by the national housing bank this clause also enables the national housing bank to accept gifts, grants and donations or benefactions from government or any other source clause 16 enables the national housing bank to borrow in foreign currency with the prior approval of tre central government and sets out the procedure to be followed for grant of loans and advances by the national housing bank out of the foreign currency borrowings and for booking of the loss or profit in connection therewith clauses 17 and 18 enable the national housing b~ to transfer or acquire the rights and interests in relation to any loan or advance granted by it or by any other housing finance institution clnuse 19 provides that while entering into any transaction under chapter iv with a borrowing institution, the national housing bank may impose such conditions as it may deem necessary for protecting the interests as also to achieve the objectives of this bill cla'use 20 provides for the circumstances which the national housing bank may call for repayment of any loan or advance before the due date fot its repayment c1a'use 21 provides that the national housing bank shall have free access to all the records of a borrowing institution which may be considered ne-::essary in connection with providing financial or other assistance clause 22 provides that the validity of the loans and advances extended by the national housing bank shall not be questioned merely on the ground of non-compuance with any requirements ot any resolution, contract, etc, but nothing in this clause shall render valid any loan or advance obtained by any company or co-operative aociety where the said company or co-operative society is not empowered by ita memor· andom to obtain loans or advances ;  :',l'i'n clause 23 provides that the national housing bank shall not grant loans or advances on the security af its own bonds and debentures clause 24 empowers the national housing bank to inspect at its own instance or on the direction of the reserve bank, the books and accounts of any housing finance institution to which it has extended financial assistance of whatsoever nature and make it obligatory for the national housing bank to :furnish a copy of its inspection report to the institution concerned it also casts an obligation on the officers and other employees of the housing finance institutions to produce to the inspecting officer all books and accounts and other documents as also to furnish any statement and information a8 may be required within the time specified by him clause 25 empowers the national, housing bank to collect credit information from the musing finance institutioiui relating to loans and advances and other credit facilities granted, nature of security taken therefor, guarantees furnished and any information having a bearing on the borrower's credit worthiness and casts an obligation on the housing finance institutions to turn:ish credit information sought by the national housing bank clause 26 enables the national housing bank to publish the credit information or any other information obtained by it under this act, in any form as it thinks fit clause 27 deals with advisory services which the national housing bank may provide to the central and state governmer1ts, local authorities and other agencies connected with housing, in regard to formulation of policies aimed,at promoting the growth of housing and housing finance institutions as also matters having a bearing on shelter, housing and human settlement claube 28 definies the term 'deposit in chapter v clause 29 provides that the chapter relating to receiving of deposita shall not apply to firms and unincorporated associations of individuals but they will continue to be governed by the provisions of the reserve bank of india act, 1934 in this regard clauses 30 to 32 provid for conferring of powers on the, national housing bank to regulate various activities of housing finance institutions in accordance with the acceptance of deposits from the public these would cover the amount of the deposits, the purposes and periods for which, and the rates of interest and other terms and conditions on which, they are received ' clause 33 provides for audit of accounts of the housing finance institutions which have accepted deposits and casts on an auditor of a housing finance institution a duty to ensure compliance of the requirements like furnishing information, statements or particulars to the national hou~ ing bank regarding the deposits held by the housing finance institutions clause 34 empowers the, national housing bank to cause an inspection to be made of any housing finance institution accepting deposits for verifying the correctness or completeness of any information furnished by it or for ensuring compliance by' it of any of its obligations under this bill clause 35 prohibits soliciting of deposits by unauthorised persons clause 36 enables the provisions of chapter v to override other laws clause 37 provides for the establishment of a general fund and  such other fund or funds as the board may consider necessary, or if so directed by the reserve bank clause 38 provlde:; for the preparation of balance-sheet and accounts of the national housing bank in a !orm and manner prescdb,ed by tl:e regulationf' made under clat!se 54 claruse 39 provides that aft~ mijkmg ;pn>vlsl()tlll f<>r bad and doubtful debts, depreciation of assets and all other matters for which provibion~ is necessary or expedient or which is uauauy provided by banker& the surplus funds for the first fifteen yean fouowing the accounting year during which the national housing bank was established shall be transferred to the general fund or such other funds which the reserve bank has specified and that after the expiry of fifteen years the balanc~ of surplus shall be transferred to the reserve bank claube 40 provides for the audit of the accounts of the national housing bank by an auditor to be appointed by the reserve bank clause 41 provides for the national housing bank to furnish such teturns as the reserve bank may require clause 42 makes it obligatory for the national housing bank to make an annual report to the reserve bank on the trend and progress of housing in the country  clause 43 provides for the staff of the natibltll\ housing bank01ause 44 provides that the directors, members of committees, auditors, advisers, officers and other emplayees of the national housing bank aliall znake a _laration of fidallity and secrecy in the fonn set out in tke !'tnt schedule clause 45 provides that any defects in appointments, etc, shall not i~vwdate acts of the board or its committees ctat4se 4g re~~s ~o pro~ection of a<:tion taken in good faith clau,se 47 seeks to ind~nify the cli,~tprs of th,~ natio~l housing bank against all losses and expenses incurred by them in, or ~n relation to, the discharge of their duties other than those caused by their own wilful acts or defaults c4£use 48 provides for exemption of the national housing bank from payment of income-tax and all other taxes on inoomeproftts or gains and on t'le lines of similar exemption given to the reserve bank of india, national bank for agriculture and rural development, industrial development b8nk of india and export-import bank of india cklucre 49 provides for penaltie~ for making false statements in any returns, balance-sheet or ~ther documents furnished to the national rousing ~nk or for failure to produce books, accounts or ather docu-~~nts required by the national housing bank it also provides for penalties for contraventions of the provisions of chapter v or of any direction or order under that chapter clause 50 provides for the responsibilities of the companies and their directors etc • and the cozmequences of any failure in this regard c1a:use 51 provides for the cognizance of the offences clause 52 provides that a court imposing any fine under this act may direct that the whole or any part thereof shall be applied in, or towarda payment of tl-e costs of the proceedings clause 53 provides for the application of the bankers' books evidence act, 1891 in relation to the national housing bank cbause 54 deals with the liquidation of the national aousing bank and provides that the national housing bank shall not be placed in liquidation, save by an order or the central government and in such manner as it may oirect clause 55 seeks to empower the board of directors of the national housing bank, with the previous approval of the reserve bank and in consultation with the central government to make regulations including retrospectively, for the purpose of giving effect to the provisions of the bill it has also been provided that the central government shall cause every regulation made before the houses of parliament clause 56 seeks to amend the reserve bank of india act, 1934, the banking regulation act, 1949 the industrial disputes act, 1947 and the payment of bonus act, 1965, in tbe manner set out in the second schedule clause 57 provides for removal of difficulties  first schedulethe first schedule gives the form for making the declaration of fidelity and secrecy  second schedule part i amendments to the reserve bank of india act 1934one amendment provides for the reserve bank making loans and advances to and generally assisting the national housing bank in these matters one of tte amendments enables the reserve bank to promote, establish, support or aid in promoting, establishing or supporting any financial institution, as its subsidiary or qtherwise this amendment would enable th~ reserve bank to promote the national housing bank its wholly owned subsidiary another amendment provides for the reserve bank establishing and maintaining a fund known as the national housing credit (long term operations) fund and to which the reserve bank will also make an annual contribution the amendments also provide for making loans and advances to and the purchasing of bonds and debentures of~ the national housing bank out of the national housing credit (long term operations) fund the other amendments are mainly consequential to the setting up of the national housing bank  part ii amendments to the banking regulation act, 1949the amendments to the banking regulation act 1949 ensure that:-(i) the national housing bank is not compelled by any autho- rity to give inspection of any of its books of accounts or other documents or furnish or disclose any statement of information when it claims that such documents, statement or information is of a confidential nature; - (ii) a person is penalised who may,-(a) obstruct any person from lawfully entering or leaving any office or place of business there or (b) hold, within the office or place of business of national housing bank any demonstration which viola~s or which prevents or which is calculated to prevent the transaction of normal business by the national housing bank other amendments are mainly consequential to the setting up of the national housing bank  parts iii and iv amendments to t!ie industrial disputes acr, 1947 and the payment of bonus ai::t 1965these are consequential clause 14 (i) provides for formulation of schemes by the national housing bank for the economically weaker sections of the society which may be supported by the subsidy contributed by the central government the extent of subsidy would depend upon the allocation made by the central government in that behalf from time to time as also the number and nature of the scheme, by the national housing bank involving subsidy the exact quantum of which cannot be anticipated at this stage 2 clause 15 (1) (b) empowers the national housing bank to borrow money from central government clause 15 (1) (f) empowers the national housing bank to receive gifts, grants, donations or benefactions from the central government it is not possible at this stage to visualize the amounts that the central government may make· available to the national housing bank under clause 15 (1) (b) and (f) 3 clause 15 (2) read with clause 15 (1) (a) provides that the central government may on a reque-st made by the national housing bank, guarantee the bonds and debentures issued by the bank as to the repayment of principal and payment of interest at such rate as may be fixed by that government the extent of this contingent liability will depend upon 'the size of the market borrowings of the national housing bank and the exact quantum of which would be known only after the bank has started functioning 4 clause 16 (2) envisages guarantee by the central government for the borrowings by the national housing bank in foreign currency this guarantee involves liability of a contingent nature and the extent of such liability, if any, wqllld be known only after the bank has started functioning 5 clause 16 (4) (b) (ii) provides that in certain circumstances the loss or profit in connection with any borrowing of foreign currency under subclause (1) shall be reimbursed by, or paid to the central government it is not possible to visualize at this stage the ,quantum of such loss or profit which may have to be reimbursed by or paid fa the central government 6 no other provisions of the bill involves any ether expenditure of recurring or non-recurring nature from and out of the consolidated fund of india sub-clause (1) of clause 55 of the bill confers on the board of the national housing bank power to make regulations, by notification in the official gazette, with the previous approval of the reserve bank and in consultation with the central government sub-clause (2) of that clause spec~fies matters which such regulations may provide for these include among other things, fees and allowances that may be paid to the directors for att~nding the meetings of the board or its committees; the times and places at which the board may meet and the rules of procedure that may' be followed in regard to the transaction of business; the number of members that the executive committee may consist, the functions that may ;be discharged, the times and places at which it will meet and the rules of procedure that may follow; the special fund, the reserve fund and other funds to be created; the form and manner in which the balance-sheets and accounts may be prepared and maintained; the manner and terms of i~ue and redemption of bonds and debentures; the manner in which and the conditions subject to which the national housing bank may borrow in foreign currency; the form in which the statements, information etc is to be furnished; the dutieo; and conduct salaries allowances and other conditions of service of officers etc: and the establishment and maintenance of provident fund and other funds 2 sub-clause (4) of clause 55 empowers the board to make regulations in respect of the above matters with retrospective effect from a date not earlier than the date of commenecement of the act this power is mbject to safeguard that no retrospective eftect shall be given to any regulation so as to prejudicially affect the interest of any person to whom such regulation may be applicable clause 57 of the bill empowers the centra' government to remove by order any difficul'y which mav arise in ~ving effect the provisions of ~he leiislation, ani this power is limitei to three years this is by way (\f abundant caution and for covering difficulties which it is not practicable to visualize as the matter with respect of which under clause 55 pertain t') matters ')f procedure or detail as the making of regu'ations with retrospective eftect is subje::t to the safeguard aforementl(\ned and the ma~ters witb regard to which under c~ause 7 pertain to matters which it is not practicable to visualize at this stage, the delegation of legislative power is of a normal character  annexure extracr from the reserve bank of india 4ct, 1934(2 of 1934) - - - - - cash reserves of scheduled banks to be kept with the bank 42 (1) every bank included in the second schedule shall maintain with the bank an average daily balance the amount of which shall not be less than three per cent of the total of the demand and time liabilities in india of such bank as shown in the return referred to· in subsection (2): provided that the bank may, by notification in gazette of india, increase the said rate to such higher rate as may be specified in the notification so however that the rate shall not be more than fifteen pe" cent of the total of the demand and time liabilities explanation-for the purposes of this section,- -   - (c) "liabilities" shall not include--  -   (ii) the amount of any loan taken from the bank or from the development bank or from the exim bank or from the reconstruction bank or from the national bank;    - -  extracts from the banking regulation act, 1949 (10 of 1949) -   - cash reserves 18 (1) every banking company, not being a scheduled bank, shall maintain in india by way of cash reserve with itself or by way of balance in a current account with the reserve bank or by way of net balance in current accounts or in one or more of the aforesaid ways a sum equivalent to at least three per cent of the total of its demand and time liabilities in india as on the last friday of the second preceding (ortmght and ~hall submit to the reserve bank before the twentieth day of every month a return showing the amount so held on alternate friday!> during a month with particulars of its demand and time liabilities in india on such fridays or if any such friday is a public holiday under the negotiable instruments act, 1881, at the close of business on the preceding working day erplanation-in this section, and in section 24,-(a) "liabilities in india" shall not include-'" - - - - (iil) any advance taken trom the reserve bank or from the development bank or from the exim bank or from the reconstruction bank or from the national bank by the banking company; -  -  - ma (1)     - production of documents of confidential nature (3) for the pur\>oses of this section "banking company" includes the reserve bank, the bevelopment bank, the exim bank, the reconstruction bank, the national bank, the state bank of india, a corresponding new bank, a regional rural bank and a subsidiary bank    36ad (1) -      - • (3) for the purposes of this section "banking company" includes the reserve bank, the development bank, the exim bank, the reconstruction bank, the national bank, the state bank of india, a corresponding new bank, a regional rural bank and a subsidiary bank  punishments for certain activities in relation to banking companies      56 the provisions of this act" as in force for the time being, !bhall apply to, or in relation to, co-operative societies as they apply 11;0, or in relation to, banking companies subject to the following modifications, namely:-act to apply to cooperative societies subject to modifications (j) for section 18, the following section shall be substituted, namely:-cash reserves 18 (1) every co-operative bank, not being a state co-operative hank for the time being included in the second schedule to the reserve bank of india act, 1934 (hereinafter referred to as a "scheduled state co-operative bank"), shall maintain in india by way of cash reserve! with itself or by way of balance in a current account with the reserve bank or the state co-operative bank of the state concerned or by way of net balance in current accounts or in the case of a primary co-operative bank, with the cental cooperative bank of the district concerned, or in one or more of thiaforesaid ways, a sum equivalent to at least three per cent of the total of its demand and time liabilities in india as on the last friday of the second preceding fortnight and shall submit to the reserve bank before the fifteenth day of every month a return showing the amount so held on alternate fridays during a month with particulars of its demand and time liabilit!es in india on such fridays or if any such friday is a public holiday under the negotjable instruments act, 1881, at the close of business on the precedjng working day explanation-in this section and in section 24- -  - (a) "liabilitic!$ in india" shall not include--- (13) any advance taken from a state government, the reserve bai'lk, the development· bank; the ex~m bank, the reconstruction bank, the national bank or from the national co-operative development gorporation established under section 3 of the national coopertive development corporation act, 1962 by the cooperative bank; - - - - - - - - - - dcfini· 2 in this act, unless there is anything repugnant in the subject or lions context,-(a) "appropriate government" meanslj of 194r 15 of 1941< 34 lif 1948 4h of 1941( 19 of 1952 '27 of 1953 11 of 1956 43 of 1959 4701 1'161 5h of 1962 52 of 1961 37 of 1964 43 of 1971 21 or 1976 (i) in relation to any industrial dispute concernin2 any industry carried on by or under the authority of the central government, or by a railway company or concerning any such controlled industry as may be specified in this behalf by the central government or in relation to an industrial dispute concerning a dock labour board 'established under section 5a of the dock workers (regulation of employment) act, 1948, or the industrial finance' corporation of india established under section 3 of the industrial finance corporat:on act 1948, or the employees' state insurance corporation established undel' section 3 of the employees' state insurance act, 1948, or the board of trustees constituted under section 3a of the coal mines provident fund and miscellaneous provisions act, 1948, or the central board of trustees and the state boards of trustees constituted under section 5a and section 5b, respectively, of the employees' provident fund and miscellaneous provisions act, 1952, or the "indian airlines" and "air india" corporations established under section 3 of the air corporations act, 1953, or the life insurance corporation of india established under section 3 of the life insurance corporation act, 1956, or the oil and natural gas commission established under section 3 of the oil and natural gas commission act, 1959, or the deposit insurance and credit guarantee corporation established under section 3 of the deposit insurance and credit guarantee corporation act, 1961, or the central warehousing corporation established under section 3 of the warehousing corporations act, 1962, or the unit trust of india established under section 3 of the unit trust of india act, 1963, or the food corporation of india established under section 3 or a board of management establishment for two or "l1ore contiguous slates under section 16, of the food corporations act, 1964, or the international airports authority of india constituted under section 3 of the international airports authority of india act, 1971, or a regional rural bank established under section 3 of the regional rural banks act, 1976, or the export credit and guarantee corporation limited or the industrial reconstruction bank of india  