TaxTMI 
TaxTMI 
An indian pvt Ltd. co. wants to accept a loan of Rs. 1 crore from an NRI.can it be accepted and what are terms & conditions & formalities?
Loan from NRI to a private company
09 Dec 2008 
2 Replies 
10858 Views Asked by
Acceptance of deposits from non-resident lenders requires compliance with company deposit rules and foreign exchange restrictions.
A private company must determine the NRI lender's status; if not a shareholder, the transaction falls under Sec 58A and the Companies (Acceptance of Deposits) Rules, 1975, requiring compliance. The company must also comply with foreign exchange rules: repatriation basis acceptance from NRIs is discontinued and RBI guidelines bar borrowings for relending, agriculture/plantation, and real estate, together with applicable procedural and reporting formalities. (AI Summary)
A private company must determine the NRI lender's status; if not a shareholder, the transaction falls under Sec 58A and the Companies (Acceptance of Deposits) Rules, 1975, requiring compliance. The company must also comply with foreign exchange rules: repatriation basis acceptance from NRIs is discontinued and RBI guidelines bar borrowings for relending, agriculture/plantation, and real estate, together with applicable procedural and reporting formalities. (AI Summary)