Rupee loan to NRI/PIO allowed under LRS subject to interest free status, minimum one year maturity and account restrictions. A resident individual may make a rupee loan to a NRI/PIO close relative by crossed cheque or electronic transfer provided the loan is interest free, has a ... Summary
Rupee loan to NRI/PIO allowed under LRS subject to interest free status, minimum one year maturity and account restrictions.
A resident individual may make a rupee loan to a NRI/PIO close relative by crossed cheque or electronic transfer provided the loan is interest free, has a minimum one year maturity, remains within the lender's LRS limit for the financial year, and is used for the borrower's personal or Indian business purposes. The loan must not finance prohibited activities such as chit funds, Nidhi companies, specified agricultural/real estate activities or trading in transferable development rights. The amount must be credited to the borrower's NRO account, shall not be remitted abroad, and repayment must occur via inward remittances, debit to NRO/NRE/FCNR accounts, or sale proceeds of charged assets.
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