BORROWINGS BY NON-RESIDENT INDIAN INDIVIDUALS
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Foreign Exchange Facilities for Individuals — Foreign Exchange Facilities for Individuals.
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Under which regulation do NRIs borrow funds in foreign currency from close relatives resident in India?
NRIs can borrow in foreign currency from close relatives resident in India under the Foreign Exchange Management (Borrowing and Lending) Regulations. The loan must be interest-free and for a minimum maturity of one year.
Under which FEMA schedule are NRI borrowings from resident close relatives regulated?
Schedule I of Foreign Exchange Management (Borrowing and Lending) Regulations.
What is the maximum amount an NRI can borrow in rupees from a resident individual who is a close relative?
An NRI can borrow up to Rs. 25 lakh in Indian rupees from a close relative who is a resident individual. The borrowing must be on a non-repatriation basis.
What is the maximum repayment period allowed for a foreign currency loan given by a resident to an NRI relative?
The loan must be repaid within one year.
Can an NRI take a loan against the security of NRE fixed deposits from an authorised dealer bank in India?
Yes, an NRI can obtain a rupee loan from an authorised dealer (AD) bank in India against the security of NRE fixed deposits. Such loans can be used for personal or business purposes but not for prohibited investments.
Can an NRI borrow rupees from an Indian resident who is not a close relative?
No, borrowing rupees from non-relatives is generally not permitted under FEMA.
Are loans availed by NRIs against NRO fixed deposits freely repatriable?
No, loans availed by NRIs against NRO fixed deposits are not repatriable outside India. The loan proceeds must be used only for local (domestic) purposes.
What is the maximum ceiling on NRI borrowings in rupees from a resident close relative?
Rs. 25 lakh per NRI borrower from a resident close relative.
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