1. Who is an NRI?
Under the Foreign Exchange Regulation Act of 1973, Non-Resident Indians are:
Indian citizens who stays abroad for employment or carrying on business or
vocation outside India or for any other purpose in circumstances indicating an
indefinite period of stay abroad;
OR
Government servants who are posted abroad on duty with the Indian missions and
similar other agencies set up abroad by the Government of India where the
officials draw their salaries out of Government resources;
OR
Government servants deputed abroad on assignments with foreign Governments or
regional/international agencies like the World Bank, International Monetary Fund
(IMF), World Health Organization (WHO), Economic and Social Commission for Asia
and the Pacific (ESCAP)
OR
Officials of the State Government and Public Sector Undertakings deputed
abroad on temporary assignments or posted to their branches or offices abroad.
Guidelines Issued by the Reserve Bank of India for grant of Housing Loans to
NRIs.
The Reserve Bank of India (RBI) has issued certain guidelines for granting loans
to Non-Resident Indians. The guidelines are:
The loan amount shall not exceed 85% of the cost of the dwelling unit.
Own contribution, which is the cost of dwelling unit financed less the loan
amount, can be met from direct remittances from abroad only through normal
banking channels, your Non-Resident (External) [NR (E)] Account and /or
Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee
account [NRSR] in India.
Repayment of the loan, comprising of the principal and interest
including all the charges are to be remitted from abroad only through normal
banking channels, your Non-Resident (External) [NR (E)] Account and /or
Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee
account [NRSR] in India.
2. For what purposes are loans available to NRIs?
NRIs can avail loan for buying or constructing a new home, extending or
improving an existing home or even to buy a plot.
3. What is meant by "Own Contribution"? How can this "Own
Contribution be paid"?
Own Contribution is the cost of the dwelling unit financed less the loan
amount. The own contribution should be met from direct remittances from abroad
through normal banking channels or from the Non-Resident (External)
Account/Non-Resident (Ordinary) or the Non-Resident Special Rupee account in
India.
4. What are the common documents to be submitted along with the
application?
The following documents are required along with the application form:
Photocopy of the labour contract duly countersigned by your employer (translated
to English for non-English documents).
Latest salary certificate (in English) specifying the following:
- Name (as it appears in the passport).
- Date of joining.
- Passport Number.
- Designation.
- Perquisites and salary.
- Photocopy of labour card/identity card.
- Photocopy of valid resident visa stamped on the passport.
- Photocopy of monthly statement of local bank account.
- Property related documents.
5. What security will I have to provide?
Typically the security for the loan is first mortgage of the property to be
financed, normally by way of deposit of title deeds and/or such other collateral
security as may be necessary.
In addition interim security may be required, if the property is under
construction. Collateral or interim security could be in the form of assignment
of life insurance policies, surrender value of which is at least equal to the
loan amount, pledge of shares and such other investments.
6. Can I give a Power of Attorney in favour of a person of my
choice in India to complete loan formalities on my behalf?
Yes. Normally it is desirable to appoint a Power of Attorney in
India to represent you in dealings in India. The Power of Attorney should be
executed as per drafts provided by the housing finance company. The Power of
Attorney can be given to any person of your choice in India.
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