UPSC Prelims 2007 Q99: Indian Economy – Banking & Financial Sector

UPSC Prelims 2007, General Studies Paper I · Indian Economy

The National Housing Bank was set up in India as a wholly - owned subsidiary of which one of the following?

Answer: (b) Reserve Bank of India

Explanation

National Housing Bank (NHB)

Detail	Fact
Set up	9 July 1988 under the National Housing Bank Act, 1987
Original owner	Wholly owned by the Reserve Bank of India
Recommended by	High-Level Group under Dr C. Rangarajan (1985)
Ownership change	2019 — RBI's entire stake transferred to the Government of India
Regulation change	2019 — regulation of Housing Finance Companies moved from NHB to RBI; NHB keeps supervision

NHB is the apex body for housing finance — it refinances HFCs and banks for housing loans.

Answer: (b) Reserve Bank of India.

(a) Incorrect. SBI has no ownership stake in NHB.
(b) CORRECT. NHB was set up in 1988 as a wholly owned subsidiary of the RBI.
(c) Incorrect. ICICI Bank is a private bank with no role in NHB's ownership.
(d) Incorrect. LIC has housing finance arms but did not own NHB.

NHB (1988) = wholly owned by RBI originally; ownership moved to Government of India in 2019.

NHB was set up in 1988 as a wholly owned subsidiary of the RBI.

Saying NHB is still RBI-owned — it is fully government-owned since 2019.
Confusing NHB with NABARD, which was also RBI-owned at birth (1982) and later moved to the Government.
Confusing NHB with HUDCO (housing/urban infrastructure PSU).

RBI's 'children' later given to the Government: NABARD (1982) and NHB (1988).