Regulation 8 - Providing housing loan in rupees to a non-resident - Foreign Exchange Management (Borrowing And Lending In Rupees) Regulations, 2000

8. Providing housing loan in rupees to a non-resident :- An authorised dealer or a housing finance institution in India approved by the National Housing Bank may provide housing loan to a non-resident Indian or a person of Indian origin resident outside India, for acquisition of a residential accommodation in India, subject to the following conditions, namely: (a) the quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person resident in India; (b) the loan amount shall not be credited to Non-resident External (NRE) / Foreign Currency Non-resident (FCNR)/Non-resident Non-repatriable (NRNR) account of the borrower; (c) the loan shall be fully secured by equitable mortgage of the property proposed to be acquired, and if necessary, also by lien on the borrower's other assets in India; (d) the instalment 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 Non-repatriable (NRNR)/ Non-resident Ordinary (NRO)/ Non-resident Special Rupee (NRSR) account in India, or out of rental income derived from renting out the property acquired by utilisation of the loan 1 or by any relative of the borrower in India by crediting the borrower's loan account through the bank account of such relative. 1 Explanation: The word `relative' means `relative' as defined in Section 6 of the Companies Act, 1956. (e) 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. ************************* Note : 1. Has been inserted vide Notification No. 117/2004 dated 25/5/2004