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NRIs may consider borrowing from a resident Indian due to various factors. This can be the rate of interest which is payable on the amount of loan borrowed from the resident Indian or the Indian Company. There have to be certain compliances adhered by the NRI who is borrowing money.
Whenever NRI Borrowing from a resident Indian/ company is considered, then there are specific compliances which need to be followed as per the Reserve Bank of India.
NRI borrowing from a resident Indian is regulated by the following:
A resident individual may grant INR loan to an NRI relative by way of crossed cheque/electronic transfer subject to the following terms and conditions:
The proceeds of the loan that is granted to the NRI from the resident individual shall be only used for the following purposes:
Read, Also: Can an Indian Citizen Borrow from a Foreign National/ NRI?.
A body corporate is defined under the Companies Act 2013 and previous Company Law 1956.
A body corporate registered or incorporated in India may grant rupee loan to its NRI/PIO employees subject to the following terms and conditions:
The documents required for NRI Borrowing from a Resident Indian/ Company:
Also, Read: Guide to the Types of NRI Bank Accounts in India.
Varun Hariharan has completed the Legal Practice Course from BPP Law School, Manchester. He has a Masters in Commercial and Corporate Law from the Queen Mary University of London and LLB Honours from Bangor University, UK. He specialises in law related to corporate, artificial intelligence and technology law.
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