National Housing Bank (NHB), a wholly owned subsidiary of Reserve Bank of India (RBI), was set up on 9 July 1988 under the National Housing Bank Act, 1987. NHB is an apex financial institution for housing.

Objective

To promote a sound, healthy, viable and cost effective housing finance system to cater to all segments of the population and to integrate the housing finance system with the overall financial system.
To promote a network of dedicated housing finance institutions to adequately serve various regions and different income groups.
To augment resources for the sector and channelise them for housing.
To make housing credit more affordable.
To regulate the activities of housing finance companies based on regulatory and supervisory authority derived under the Act.
To encourage augmentation of supply of buildable land and also building materials for housing and to upgrade the housing stock in the country.
To encourage public agencies to emerge as facilitators and suppliers of serviced land, for housing.

The he 3 Main function of NHB in the housing finance business in the country are as follows

1. Promotion and Development Function
The institution had been set up when regional and local level housing finance institution were nearly absent and the banking sector was not willing to do housing finance on any significant level. As a result the sector was grossly capital deficient and the housing shortage in the country was growing at an alarming level.

2. Regulatory Function
The second most important function of NHB is the regulatory role assigned to it. This role assumes more importance as the housing finance system in India enters a secondary phase of development in terms of integration with the debt and capital markets.

3. Financial Function
The third important role of NHB is to provide financial assistance to the various banks and housing finance institutions. As an apex refinance institution, the principal focus is to generate large scale involvement of primary lending institutions falling in various categories to serve as dedicated outlets for assistance to the housing sector