Report on Trend and Progress of Housing in India, 2013

Established under National Housing Bank Act, 1987 as the Apexlevel institution for housing finance in the Country.

Preamble: "To operate as a principal agency to promote housingfinance institutions both at local and regional levels and to providefinancial and other support to such institutions and for mattersconnected therewith or incidental thereto.

Vision: Promoting inclusive expansion with stability in housingfinance market

Mission: To harness and promote the market potentials to serve thehousing needs of all segments of the population with the focus onlow and moderate income housing

National Housing Bank

Contents of Presentation

Economy and Housing : Backdrop

Overview of the Indian Housing Sector

New Developments in the Indian Housing Sector

Institutional Performance viz-a-viz Housing Finance

Operations and Performance of Housing Finance Companies

Comparison: Slab wise disbursements of HFCs & PSBs to individuals (FY 2012-13)

Emerging Trends in 2013 in the housing and housing finance sector

Growth slowdown, persistent inflation and the twin deficit risks came to the fore during 2012-13

Surveys show that business confidence remains subdued despite reforms and policy initiatives since September 2012

Volume of housing transactions higher as compared to previous year

Mortgage & housing finance market in India on a satisfactory traction

The Indian Mortgage Market has been growing steadily owing to enabling factors such as stable operating environment, stable property prices etc.

Economy and Housing : Backdrop

The sector has been demonstrating the same resilience as it did during the global meltdown in 2007-09Enhanced risk management Vigil on exposure limitsComfortable capital adequacy positions of HFCs

Economy and Housing : Backdrop Contd..

Housing Shortage

Demand Side Supply Side

Growing Middle Class Lack of availability of land

Urbanization- 31.16 per cent of the total population

Lack of availability of Finance at reasonable rate

Increase of slums and squatters

Operational constraints: Absence of large scale digitization of land records and the easy access to such records

Low Penetration: Housing to GDP ratio is around 9% (significantly lower than the levels achieved in most of the advanced as well as emerging economies )

As per the report of the Technical Group on Urban Housing shortage in India (2012-17), India needs 18.8 million housing units in the cities alone, out of which more than 95% are in the EWS/LIG categories.

Overview of the Indian Housing Sector

The Rajiv Rinn Yojna: A Revised Interest Subsidy Scheme as an additional instrument foraddressing the housing needs of the EWS/LIG segments in urban areas. The Schemeenvisages the provision of a fixed interest subsidy of 5% (500 basis points) on interestcharged on the admissible loan amount to EWS and LIG segments to enable them to buy orconstruct a new house or for carrying out addition (of a room / kitchen / toilet / bathroom)to the existing building.

The Credit Risk Guarantee Fund Trust for Low Income Housing was set up & registered bythe Government of India (GoI) on 1st May, 2012 through the Ministry of Housing and UrbanPoverty Alleviation (MoHUPA).

NHB in association with Genworth, Asian Development Bank and International FinanceCorporation has set up Indias maiden Mortgage Guarantee Company - India MortgageGuarantee Corporation Pvt. Ltd. (IMGC). The Company was granted Certificate ofRegistration by the Reserve Bank of India (RBI) in April 2013. NHB is the majority shareholderwith 38 per cent stake in IMGC.

Rs 6,000 crore allocated for Rural Housing Fund in 2013-14 Additional deduction of interest upto Rs 1 lakh for a person taking first home loan upto Rs

25 lakh during period 1.4.2013 to 31.3.2014.

National Housing Bank (NHB) to set up Urban Housing Fund and Rs 2,000 crore allocated inthis regard

Overview of the Indian Housing Sector: New Developments

A) Key Players: Scheduled Commercial Banks (SCBs) and Housing Finance Companies (HFCs). B) Housing Loans as a percentage of Gross Bank Credit for SCBs in the last Two Years (in Rs Crore)

Institutional Performance viz-a-viz Housing Finance

Details Mar-12 Mar-13

Gross Bank Credit (GBC) 43,79,300 49,98,400Housing Loans (Priority & Non Priority) 4,03,400 4,62,200

Housing Loans as percentage of GBC 9.21% 9.25%

Housing Loans (Priority) 2,66,500 (66.06 %) 2,68,100 (58.01 %)

Data for PSBs 2013 (April 2012-March 2013)

2012 (April 2011-March 2012)

Percentage change

Total Disbursement of Housing Loans

71,857 73,831 (2.67)%

Total Outstanding f H i L

3,11,982 2,73,012 14.27 %

C) Disbursements and Outstanding Housing Loans of PSBs in the last Two Years (in Rs Crore)

Housing loan disbursements Public Sector Banks (FY13): Ticket size Mix

7.7 7.1 4.1

15.17.5

5.6

18.0

15.9

15.7

26.9

36.041.6

32.4 33.4 33.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

FY 2010-11 FY 2011-12 FY 2012-13(Provisional)

Above Rs 25 LakhRs 10-25 LakhRs 5-10 Lakh

Rs 2-5 Lakh

Upto Rs 2 Lakh

The housing loansoutstanding of SCBs as on31st March, 2013 was Rs4,62,200 crore.

67% of the total housingloans disbursed by the PSBsduring 2012-13 are forHousing Loans upto Rs 25lakh

Approximately 10% of totalhousing loans disbursed areless than Rs 5 lakh

Operations and Performance of Housing Finance Companies

A) FINANCIAL PROFILES OF HFCS Number of registered HFCs increased from 54 as on 31-03-2012 to 56 as on 31-03-2013.Number of branches/offices of registered HFCs increased from 1,693 to 2,065 as on 31-03-2013.Total outstanding housing loan portfolio increased by 30.69%. to Rs. 2,90,427 croreTotal NNPAs as on 31-03-2013 were Rs 1,754 crore an increase of 20.97 %. Total Net Owned Funds as on 31-03-2013 increased by 37.53%,

Particulars 2011 2012 Growth % 2013 Growth %

Paid up Capital 5,168 5,403 4.55 5,541 2.55

Free Reserves 29,658 34,658 16.86 48,019 38.55

Net Owned Fund (NOF) 32,731 37,103 13.36 51,027 37.53

Public Deposits 28,694 35,476 23.64 44,179 24.53

Outstanding Housing Loans 186,438 222,225 19.20 290,427 30.69

Operations and Performance of Housing Finance CompaniesA) Borrowers type-wise Disbursement Trend of Housing Loans by HFCs

Total disbursements of Rs. 106, 135 crore. Growth of 34% Out of total disbursements for the year 2012-13, 84% of their housing loans were to

individuals, 12% to builders and 4% to corporate bodies.

A) Total Disbursement of Housing loan to individuals

Particulars 2012 % to Total 2013 % to Total

upto Rs. 2,00,000 362 0.53 505 0.55Above Rs. 2,00,000 and upto Rs. 500,000 1,912 2.80 2,027 2.19

Above Rs. 5,00,000 and upto Rs. 10,00,000 9,584 14.05 12,649 13.66Above Rs. 10,00,000 and upto Rs.

15,00,0009,732 14.27 11,659 12.59

Above Rs. 15,00,000 and upto Rs. 25,00,000

17,283 25.33 22,037 23.80

Above Rs. 25,00,000 29,348 43.02 43,712 47.21Total 68,221 100.00 92,589 100.00

28.99 %

Comparison: Slab wise disbursements of HFCs & PSBs to individuals (FY 2012-13)

PSBs HFCs

Category/size of housing loan

(in Rs )

Amountin Crore

Percentage to total

Amountin Crore

Percentage to total

up to. 2,00,000 2957 4.1 505 1.16

Above . 2, 00,000 and upto . 500,000

4028 5.6 2,027 2.19

Above 500,000 and upto 10,00,000

11281 15.7 12,649 13.66

Above 10,00,000 and up to 25,00,000

29912 41.6 33,696 36.39

Above 25,00,000 23678 33.0 43,712 47.21

Total 71857 100 92,589 100

67 % (Rs. 48178 crore)

53 % (Rs. 48877 crore)

NPA (as on march 31, 2013) PSBs : 2.35 % (Provisional)

NPA (as on march 31, 2013) HFCs : 0.45 %

Emerging Trends in 2013 in the housing and housing finance sector:

Retail home loan market is well integrated into the broader financialsector and the capital marketLarge market segment dependent on formal financial system for creditavailability.The Government-sponsored schemes and programs at national andstate levels have given considerable boost to the housing infrastructurein the country and have led to increased credit flow into the low incomesegmentA parallel intervention in terms of mortgage guarantee has beenintroduced for mitigating the credit risk associated with the segmentPolicies to facilitate capital inflows in the housing sector through FDIand ECB route will improve both supply of funds as well as standardsand qualities of lending and constructionTechnology to be packaged with financing

Emerging Trends in 2013 in the housing and housing finance sector:

Focus on niche market segment likeEnergy Efficient HomesRural HousingGovernment Sponsored Schemes like RRY and CRGFTLIH

Financial Innovation- Covered Bonds, RML etc.Union Budget Support (fiscal) towards Housing and HousingFinance Sector Regulatory SupportSustained focus on Credit-Risk Mitigation MeasuresThe Real Estate (Regulation and Development Bill)

Thank You

Report on Trend and Progress of Housing in India, 2013Slide Number 2Contents of PresentationSlide Number 4Slide Number 5Slide Number 6Slide Number 7A) Key Players: Scheduled Commercial Banks (SCBs) and Housing Finance Companies (HFCs). B) Housing Loans as a percentage of Gross Bank Credit for SCBs in the last Two Years (in Rs Crore)Slide Number 9Slide Number 10Slide Number 11Slide Number 12Emerging Trends in 2013 in the housing and housing finance sector:Emerging Trends in 2013 in the housing and housing finance sector:Thank You