Are NRI's/PIO's allowed to rent out the properties (residential/commercial)?
Yes, they can freely rent out their immovable property, whether purchased through application of forex or otherwise. Only the after-tax amount of such rental income can be repatriated outside the country without seeking any permission from the RBI. |
Does RBI have any guidelines for loans to NRI's/PIO's?
Yes. The guidelines laid by RBI for grant of Housing Loans to NRIs are:
- A loan of upto 85% of the cost of the residential property can be availed.
- The remaining cost of dwelling unit can be met through direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
- Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India
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Can other Authorised financial institutions grant loans to NRIs for acquisition of a flat/house for residential purposes?
Yes, Authorised dealers can grant loans to NRI's for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. The repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts. |
Can Authorised financial institutions grant housing loan to NRI's either as a principal borrower or as a co-applicant / guarantor or where the land is owned jointly by such NRI borrower with his resident close relative?
| Yes. Such housing loans can be availed as both a principal borrower or as a co-applicant / guarantor or where the land is owned jointly by such NRI borrower with his close relative. The loan can also be repaid by the close relatives in India of the borrower. |
What documents do I need to submit along with the application for a loan?
The following documents are normally to be submitted along with the loan application:
- Copy of an employment letter in English translation duly countersigned by the employer.
- Latest pay slip (in English) with the following details:
i. Name (as it appears in the passport)
ii. Date of joining
iii. Passport Number
iv. Designation
v. Perquisites and salary
- Copy of the company identity card.
- Copy of valid resident visa stamped on the passport.
- Copy of monthly statement of local bank account for the last 4 months.
- Property related documents.
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Can an NRI borrow a loan against the security of immovable property in India? Are there any restrictions?
An NRI can borrow against the security of immovable property from Authorised financial institutions but are subject to following conditions:
- The loan should be used for personal requirements or for borrower's own business purposes; and
- Loan cannot be used for the following activities:
a. Business of chit fund, or
b. Nidhi Company, or
c. Agriculture or plantation activities or in real estate business, or construction of farm houses, or
d. Trading in Transferable Development Rights (TDRs),
- The loan amount cannot be remitted outside India,
Repayment of loan shall be made from out of remittances from abroad or by debit to NRE/FCNR/NRO account or out of the sale proceeds of shares or securities or immovable property against which such loan was granted. |
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