While housing finance is experiencing exponential growths, the menace of bad loans cannot be ignored. These loans require better monitoring, fair assessment of property and compliance with end-use principles.

Housing has always been an important agenda for the Government of India. The reason is simple. It is the visible result of the developmental plans implemented by the government. Also, it generates national income by creating employment and helps the individuals in their socioe-conomic development. Therefore, the government policies on the housing front have a direct impact on the health of the economy. Research has already proved that in most countries housing has become the potential for economic growth since it gives impetus to the economy by enhancing capacity utilization of related industries such as steel, cement, transportation, etc., thereby increasing revenues by way of taxes.

The home loan sector in India is on a boom. The real estate boom has added new dimensions to the housing finance sector, providing competitive edge with 13 new companies foraying into the business in the last three years. The new class of young buyers, whose affordability is high, is spending a little more on paying Equated Monthly Installments (EMIs) rather than spending huge amounts on the rents, thereby, owning a house. The government is also encouraging this sector by allowing tax benefits. Low interest rate regime and sharp rise in the income levels of city dwellers have led to an increase in the housing loans.

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