Foreign-exchange lending permits authorised dealers and eligible residents to extend external commercial lending subject to prescribed conditions.

Foreign exchange lending permits an AD in India or its overseas branch, and other eligible resident entities, to extend foreign currency-denominated external commercial lending to overseas borrowers under Schedule III. ADs may lend to Indian constituents for foreign exchange needs, rupee working capital, and capital expenditure, subject to prudential norms, interest-rate directives, and Reserve Bank guidelines. Overseas AD branches may lend against security of specified NRE, FCNR, or other permitted deposit accounts.

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