Hi, While helping one of my relatives to arrange a personal loan from his cousin settled abroad, I wondered: Can resident Indian borrow from NRI? From what I learned, an NRI can provide repatriable or non-repatriable loans to an Indian resident or an Indian business. The RBI's Master Direction on INR transactions between residents and NRIs/PIOs, as amended from time to time, the Borrowing and Lending in Rupees Regulations, 2000, and clause (e) of Section 6(3) of the FEMA, 1999, all regulate such INR transactions.
Can NRI Borrow Money from Resident Indian?
The loan will only be taken out on a non-repatriation basis, meaning that the borrower would only be able to return the loan to the NRI within India. Only the NRI's NRO account would be used for loan repayment.
The borrower in India may receive the loan amount via debit to the NRE/NRO account held with an authorised Indian bank or by inbound remittance from outside India.
The loan's duration shouldn't exceed three years. This implies that the loan must be paid back within three years.
Interest on the loan cannot be more than two percent more than the bank rate that was in effect on the day the loan was obtained
Only the NRO account of the NRI lender held in India with an AD Bank can be used to pay interest and repay the principal of the loan.
The borrower is responsible for making sure the loan is properly documented and that all transactions take place through approved Indian banking channels.
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Can Resident Indian Borrow from NRI?
Diksha66
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5 months
2025-06-27T10:47:58+00:00 2025-06-27T10:47:59+00:00Comment
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