(a) whether several housing finance companies with dubious credibility are functioning
in the country and are cheating the people;
(b) if so, whether the Government have conducted any enquiry in this regard;
(c) if so, the action taken against such companies; and
(d) the steps taken to put a check on defrauding of customers by these companies?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI BALASAHEB VIKHE PATIL) :
(a) The National Housing Bank (NHB) which regulates and supervises Housing Finance
Companies (HFCs) has reported that some cases of dubious housing finance companies
have come to notice.
(b) to (d) NHB has issued the Housing Finance Companies (NFB) Directions, 1989 which
specify the conditions for accepting deposits, interest rate payable on deposits,
maturity period of deposits, credit rating of deposit instruments, quantum of deposits
that can be accepted and compliance with Advertisement Rules. As and when non-compliance
of any of the provisions of the Directions issued by NHB are observed, NHB initiates
action eg. issuing show cause notice prohibiting the errant companies from accepting
deposits from the public and publishing particulars of such companies in various national
and regional newspapers in the interest of public awareness. The powers to deal with
such cases have recently been strengthened with the passing of the National Housing Bank
(Amendment) Act, 2000. Under this Act, NHB can order repayment of deposits in case of
default by HFCs. Further, if continuance of a HFC is deterimental to the public interest
or to the interests of the depositors, NHB can file an application for winding up of the
company. So far, 32 HFCs have been prohibited by the NHB from accepting public deposits.