Loans in india
LOANS / OVERDRAFTS IN INDIA TO NRIs .
Loans in India in Rupees to Non-Resident Indians .
Reserve Bank has delegated powers to Authorized Dealers to grant loans and overdrafts to Non-resident persons of Indian nationality / origin against the security of shares / debentures and immovable property held by them in India, according to their commercial judgment provided;.
Shares / securities are held in the name of the concerned NRI with the general or special permission of Reserve Bank. In case of loans against security of Immovable properties (other than agricultural / plantation property of farm house) to NRIs, the properties have been acquired with the general or special permission of Reserve Bank.
The loan is utilized for meeting the borrower's personal requirements and / or for his own business purposes or for any other purpose as per the loan policy laid down by the Board of Directors of the authorized dealer and not for:
1. Investment in agricultural activities or construction of farm house and in real estate business, i.e., dealing in land and other immovable properties for commercial purposes either singly or in association with others.
2. Trading in Transferable Development Rights (TDRs).
3. The business of Chit Fund.
4. Investment in capital market, including margin trading and derivatives.
5. Real estate business shall not include development of townships, construction of residential / commercial premises, roads or bridges.
The quantum of loan, margin, interest etc., is in accordance with the guidelines issued by Department of Banking Operations and Development of Reserve Bank of India regarding advances against shares / securities / immovable properties.
The loan amount is retained in India and not remitted abroad. The loan amount should not be credited to NRE / FCNR account of non-residents.
The repayment of loan is made by way of remittances from abroad through normal banking channels or by debit to the NRO / NRE / FCNR account of the borrower or out of sale proceeds of shares / securities / immovable properties against which such loan was granted.
HOUSING LOANS TO NON-RESIDENT IN RUPEES .
Eligible persons .
Non-Resident Indians.
Person of Indian Origin.
Purpose .
Acquisition of house for self-occupation as well as for renovation / repairs / improvement to residential accommodation owned by them.
Permissible Entities to finance Housing.
Authorized Dealer.
Housing Finance Institution in India approved by the National Housing Bank e.g. Housing Development Finance Corporation, liC Housing Finance, etc.
Conditions for Availing Loan .
The quantum of loans, margin money and period of repayment shall be at par with those applicable to housing finance provided to a person resident in India;.
The loan amount shall not be credited to Non-resident External (NRE) / Foreign Currency Non-Resident (FCNR) account of borrower;.
The loan shall be fully secured by equitable mortgage property proposed to be acquired, and if necessary, also by lien on borrower?s other assets in India;.
The installment of loan, interest and other charges;"> if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-Resident External (NRE) / Foreign Currency Non-Resident (FCNR) / Non-Resident Ordinary (NRO) account in India, or out of rental income derived from renting out property acquired by utilization of loan ;.
Close relatives of the borrower in India have been permitted to repay the installment of housing loans, interest and other charges, if any, through their bank account directly to the borrower's loan account with the authorized dealer / housing finance institution.
The rate of interest on the loan shall conform to the directives issued by the Reserve Bank, or as the case may be, by the National Housing Bank.
RUPEE LOANS TO NRI / PIO EMPLOYEES OF INDIAN BODY CORPORATE .
A body corporate registered in India has been permitted to grant rupee loans to its Non-Resident Indian or its PIO employees subject to the conditions stipulated :
The loan shall be granted only for personal purposes including purchase of housing property in India.
The loan shall be granted in accordance with the lender?s Staff Welfare Scheme and subject to other terms and conditions applicable to its staff resident in India.
The lender shall ensure that the loan amount is not used for the purposes specified in clauses.
The lender shall credit the loan amount to the borrower's NRO account in India or shall ensure credit to such account by specific indication on the payment instrument.
The loan agreement shall specify that the repayment of loan shall be by way of remittance from outside India, or by debit to NRE / NRO / FCNR account of the borrower and the lender shall not accept repayment by any other means.
Continuation of Rupee Loan / Overdraft granted by an Authorized Dealer to Resident who becomes a Person Resident outside India.
Authorized Dealer is allowed to accede to the request of resident that becomes a non-resident to allow continuance of loan / overdraft granted to him, subject to the following terms & ; conditions:
Authorized Dealer or the authorized bank is satisfied, according to its commercial judgment, about the reasons to continue the loan or overdraft.
Period of loan or overdraft shall not exceed the period originally fixed at the time of granting loan or overdraft.
So long as the borrower continues to remain a person resident outside India, the repayment shall be made either by inward remittance from outside India through normal banking channels or from funds held in Non-Resident External (NRE) / Foreign Currency Non-Resident (FCNR) / Non-Resident Ordinary (NRO) account of borrower.
Continuation of Rupee Loan lent by a Person other than Authorized Dealer in the event of change in the Residential Status of the Lender.
In case a Rupee loan was lent by a person resident in India and the lender subsequently becomes a non-resident, the repayment of loan by resident borrower should be made by credit to Non-Resident Ordinary (NRO) account of lender maintained with a bank in India, at the option of lender.
LENDING BY NRI TO RESIDENTS .
Non-residents can lend to residents either in foreign exchange or in rupees either on repatriable basis or non-patriable basis.
Repatriable Basis .
Lending in Foreign exchange to resident individual.
Lending in Rupees to Indian companies by issue of Non-Convertible Debentures.
Non-Repatriable Basis .
Lending in Rupees to Residents.
Lending in Rupees to Indian companies by issue of Non-Convertible Debentures .
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