ANDHRA BANK HOUSING LOAN TO NRIS (NON-RESIDENT INDIANS)

Housing Loans to Non-Resident Indians (NRIs)

Housing Loan to a Non-Resident Indian or a person of Indian Origin resident outside India, for acquisition of a residential accommodation in India, subject to the following conditions, namely:
The quantum of loan, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person in India;

The loan shall be fully secured by equitable mortgage of the property proposed to be acquired, and if necessary, also by lien on the borrower's other assets in India;

The installment of loan, interest and other charges, if any, shall be paid by the borrower by remittances from outside India through normal banking channels or out of funds in his Non-resident External (NRE) / Foreign Currency Non-resident (FCNR) Non-resident Ordinary (NRO) account in India, or out of rental income derived from renting out the property acquired by utilization of the loan;

The rate of interest on the loan shall conform to the directives issued by Reserve Bank of India or, as the case may be, by the National Housing Bank.

DEFINITIONS:

Who is a Non Resident Indian?
An Indian Citizen residing in other Countries is called a Non-resident Indian (NRI).
Who is a Person of Indian Origin?
A person (not being a citizen of Pakistan or Bangladesh) shall be deemed to be of "Indian Origin" if
He, at any time, held Indian Passport; or
He or either his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
That person is the spouse of an Indian Citizen or of a person of Indian Origin (not being a citizen of Pakistan, or Bangladesh)
Permission of Reserve Bank of India for purchase of immovable property:
As Far as Foreign Citizens of Indian Origin, Reserve Bank of India has granted general permission, Whether resident in India or abroad, to purchase immovable property in India for their bonfide Residential purpose. They are, therefore, not required to obtain permission of the Reserve Bank of India.However, a declaration is to be submitted to The Chief General Manager, Exchange Control Department, (Foreign Investment Division-III), Reserve Bank of India, Central Office, and Mumbai-400 001 within 90 days from the date of acquisition of the immovable property.

PROHIBITIONS:

No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Nepal or Bhutan without prior permission of the Reserve Bank of India shall acquire or transfer immovable property in India, other than lease, not exceeding five years.
Other Clarifications:

1. Can authorized dealer grant housing loan to non-residents where he is a principle borrower with his resident close relative as co-obligant/guarantor or where the land is owned jointly by such NRI borrower with his resident close relative? Yes. However, in such cases the payment of margin money and repayment of the loan installments should be made by the NRI borrower. As informed supra the payment should be by remittances from outside India through normal channels or out of funds in his Non-Resident External (NRE)Foreign Currency non-resident (FCNR)/ account in India or out of rental income derived from renting out the property acquired by utilization of the loan.

2. Can the residential properties be given on rent if not required for immediate use?Yes. Reserve Bank of India has granted general permission for letting out any immovable property in India. As noted above, the rental income derived from renting out the property acquired by utilization of the loan.

3. What is the rate of interest to be charged to the Housing Loans extended to the NRIs?The rate of interest to be charged to the loans allowed to Non-resident Indians is same as that of resident Indians, being communicated time to time.Practically, there are no restrictions for granting loans to Non-Resident Indians and Foreign Citizens of Indian Origin, and the loans granted to them are no different from the housing loans granted for resident Indians.