FAQ's

Q: Who is a non-resident Indian?

A: An Indian citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons posted in UN organisations and officials deputed abroad by Central/state governments and public sector undertakings on temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian origin are treated on par with non-resident Indian citizens (NRIs).

Q. Who is a person of Indian origin?

A:For investments in immovable properties A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, China, Iran, Bhutan, Sri Lanka, or Nepal) is deemed to be of Indian origin if, (i) he held an Indian passport at any time, or (ii) he or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

Q: What is an OCB?

A: Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of atleast 60 per cent by individuals of Indian nationality or origin resident outside India as also overseas trusts in which atleast 60 per cent of the beneficial interest is irrevocably held by such persons. Such ownership interest should be actually held by them and not in the capacity as ~ nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be atleast 60 per cent.

Q: Are OCBs required to produce any certificate regarding ownership/beneficial interest in them by NRIs?

A: Yes. In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60 per cent, the concerned body/trust is required to furnish a certificate from an overseas auditor/chartered accountant/certified public accountant in form OAC where the ownership/beneficial interest is directly held by NRIs, and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees.

Q: What are the various facilities available to NRIs/OCBs?

A: NRIs/OCBs are granted the following facilities :

Maintenance of bank accounts in India.
Investments in securities/shares of, and deposits with, Indian firms/companies.
Investments in immovable properties in India.
INVESTMENT IN IMMOVABLE PROPERTY

Q: Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial property in India?

A: No. An Indian citizen resident outside India does not require any permission to acquire any immovable property in India other than agricultural/plantation property or a farm house. However the purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR accounts maintained with banks in India.

Q: Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?

A: Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property other than agricultural land/farm house/plantation property, in India. They are, therefore, not required to obtain separate permission of Reserve Bank or file any declaration.

Q: In what manner the purchase consideration for the immovable property should be paid by foreign citizens of Indian origin under the general permission?

A: The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from any non resident accounts maintained with banks in India.

Q: Can such property be sold without the permission of Reserve Bank?

A: Yes. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in non-resident accounts maintained with banks in India.

Q: Can sale proceeds of such property if and when sold be remitted out of India?

In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorized dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied:-

the immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act, 1999;
the sale takes place after three years from the date of acquisition of such immovable property of from the date of payment of final installment of consideration for its acquisition, whichever is later;

the amount to be repatriated does not exceed(a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property; and in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.

In all other cases prior permission 9 RBI is required

Q: Can foreign citizens of Indian origin acquire or dispose of residential property by way of gift?

A: Yes. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of immorelde properties other than agricultural land/farmhouse/plantation property by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not.

Q: Can NRI's/PIO's rent out the properties (residential/commercial) if not required for immediate use?

A: Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income is eligible for repatriation

Q:Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?

A: Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self occupation subject to certain conditions. The purpose of loan margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investor's NRE / FCNR / NRO Accounts.

Q: Can authorised dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?

A: Authorised dealers have been granted permission to grant loans to non-resident Indian nationals for acquisition of house/flat for self-occupation on their return to India subject to certain conditions 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.

Q: Can authorized dealer grant housing loan to non-residents of Indian originality where he is a principle borrower with his resident close relative as a co-obligent / guarantor or where the land is owned jointly by such NRI borrower with his resident close relative?

A: Yes. However, in such cases, the payment of margin money and repayment of the loan installments should be made by the NRI borrower.

Q: What are the guidelines for acquisition of agricultural land / plantation property / farmhouse by NRIs and foreign citizens of Indian origin?

A: All requests for acquisition of agricultural land / plantation property / farm house by any person resident outside India may be made to The Chief General Manager, Reserve Bank of India, Central Office, Exchange Control Department, Foreign Investment Division (III), Mumbai 400 001.

NRI Housing Loan Details

Institution Max Loan
Amt .(Rs) Ceiling Max.Term ROI EMI PER LAC Basis of Calculation
ANZ 1 Crore 85% 7 Years 14.25% 1930 Monthly Reducing
CITIBANK 50 lacs 80% 7 Years 13.75% 1860 Daily Reducing
HDFC 50 lacs 85% 7 Years 5 Years-11.5% FIX
11%Variable
7 Years -12% FIX
11.5% Variable 2284
2255
1826
1798 Annual Reducing
HUDCO 50 lacs 85% 10 Years 13% 1494 Monthly Reducing
ICICI 1 Crore 85% 5 Years 11.25% 2269 Annual Reducing
LIC 50 lacs 75% 10 Years 13% 1536 Annual Reducing

Citibank Loans are available only for NRI's in the Middle East.
LIC will extend the term of the loan to 10 years for professionals.
Ceiling refers to the maximum percentage of the property value which will be funded by the Institution and the balance has to be funded by the customer.

EMI per lac figures shown above on the monthly Payments that the customer will have to make spread over the maximum term that the institution is willing to provide.

DISCLAMER

The above details are subject to change