{"id":9640,"date":"2018-06-20T17:54:03","date_gmt":"2018-06-20T12:24:03","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=9640"},"modified":"2021-01-28T11:32:16","modified_gmt":"2021-01-28T06:02:16","slug":"foreign-national-nri","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/foreign-national-nri\/","title":{"rendered":"Can an Indian Citizen Borrow from a Foreign National\/ NRI?"},"content":{"rendered":"<h2><strong>Can an Indian Citizen Borrow from a Foreign National\/ NRI?<\/strong><\/h2>\n<p>An individual and Indian company both can borrow the money from a foreign national\/ NRI but only subject to Certain Conditions. Ministry of Finance and the <strong>Reserve Bank of India<\/strong><sup><a href=\"https:\/\/www.rbi.org.in\/\"><strong>[1]<\/strong><\/a><\/sup> is regulating the lending and borrowing between residents of India and Non-Resident Indians. Notifications are issued by the RBI from time to time to regulate the lending and borrowing of Indian citizens from NRI.<\/p>\n<p><strong><a href=\"https:\/\/enterslice.com\/foreign-exchange-regulations\">Foreign Exchange<\/a> Management (Borrowing and Lending in Foreign Exchange) Regulations, 2000 (&ldquo;FEMBLFER&rdquo;) contains provisions regarding borrowing by an Indian person or a Company in foreign exchange.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/strong><\/p>\n<h2><strong>Who is a Resident of India? <\/strong><\/h2>\n<p>FEMA defines a person will be considered as residing in India if during the course of preceding financial year that person has been residing in India for more than <strong>one hundred and eighty two days<\/strong> but will not include a person who has gone out of India for the purpose of his employment, carrying his business outside of Indian neither when a person who comes to stay in India for the purpose of his employment or carrying his business<\/p>\n<p><strong>It is important to note that there is a difference between FDI (Foreign Direct Investment) and Loan.<\/strong><\/p>\n<h2><strong>What is FDI?<\/strong><\/h2>\n<p>The growth of FDI has been due to the good investment climate in most developing countries, high corporate profits, rising stock <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> valuations, ownership rules being liberalized around the world, low-interest rates and so on. <a href=\"https:\/\/enterslice.com\/learning\/foreign-direct-investment-fdi-compliance\/\">FDI<\/a> has been proven to withstand economic crisis while continuing to boost foreign national \/ NRI savings which is why most countries seek to increase their FDI.<\/p>\n<p><strong><em>There are various conditions regarding borrowing by an Indian citizen from a non-resident Indian or an Indian living outside India which are-<\/em><\/strong><\/p>\n<ul>\n<li>A very first requisite is it has to be done on a non-repatriation <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a>.<\/li>\n<li>The loan amount can only receive by the borrower by the way of inward remittance from outside India or from an NRE, NRO, FCNR, NRNR, and NRSR.<\/li>\n<li>It has to be an interest-free<\/li>\n<li>The maturity period of the loan has to be at least 1 year.<\/li>\n<\/ul>\n<p><strong><em>The Authority gives permission generally to the Authorized Dealers and its branches and also others to lend and borrow in a foreign exchange subject to certain conditions such as:-<\/em><\/strong><\/p>\n<ul>\n<li>The loan can be borrowed from outside India from any of its branch or correspondent or head office which is situated outside India up to the limit of 100% of its unimpaired Tier I capital or USD 10 million, whichever is higher<\/li>\n<li>The loan can be borrowed from Indian bank whose branch is situated outside India for the purpose of its normal course banking business outside India only.<\/li>\n<li>Can be borrowed financial institution or any bank which is situated outside of India, for granting pre-shipment or post-shipment foreign currency credit to its exported constituent.<\/li>\n<\/ul>\n<h2><strong>What is LRS?<\/strong><\/h2>\n<p>The Scheme was introduced on February 4, 2004, as a liberalization measure to facilitate resident individuals to remit funds abroad for permitted current or capital account transactions or combination of both.&nbsp;These Regulations are amended from time to time to incorporate the changes in the regulatory framework and published through <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Amendment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An &amp;quot;amendment&amp;quot; refers to the formal change or correction of a legal document, often involving additions, variations, or deletions to address irregularities or clarify points in an agreement.(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/amendment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>amendment<\/a> notifications, where the ADs allow resident individuals to make remittance payments with a value of up to USD 250,000 per financial year.<\/p>\n<h2><strong>Conclusion<\/strong><\/h2>\n<p>The Authority has adopted an approach which is; however, go through time to time of amendments on the basis of the needs of the economy. But there is still a bigger need to get these reforms to get under necessary changes.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Can an Indian Citizen Borrow from a Foreign National\/ NRI? An individual and Indian company both can borrow the money from a foreign national\/ NRI but only subject to Certain Conditions. Ministry of Finance and the Reserve Bank of India[1] is regulating the lending and borrowing between residents of India and Non-Resident Indians. Notifications are [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":9642,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1442],"tags":[2022],"acf":{"service_id":"112"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Can an Indian Citizen Borrow from a Foreign National\/ NRI? : Enterslice<\/title>\n<meta name=\"description\" content=\"An individual and Indian company both can borrow the money from a foreign national\/ NRI but only subject to Certain Conditions.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/foreign-national-nri\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Can an Indian Citizen Borrow from a Foreign National\/ NRI? : Enterslice\" \/>\n<meta property=\"og:description\" content=\"An individual and Indian company both can borrow the money from a foreign national\/ NRI but only subject to Certain Conditions.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/foreign-national-nri\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2018-06-20T12:24:03+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-01-28T06:02:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2018\/06\/Foreign-National-NRI.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"894\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":1086,"readingTime":2,"nextPost":{"id":9645,"slug":"foreign-direct-investment-norm"},"prevPost":{"id":9635,"slug":"legal-mistakes"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2018\/06\/Foreign-National-NRI.jpeg","postTerms":"FEMA","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/9640"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=9640"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/9640\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/9642"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=9640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=9640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=9640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}