Master Direction – Borrowing and Lending transactions in Indian Rupee between Persons Resident in India and Non-Resident Indians/ Persons of Indian Origin

Question 1

Persons Resident in India borrowing in INR from NRIs/PIOs may borrow under two routes, they are?

Answer 1

Borrowing by persons who are not companies and borrowing by Companies

Question 2

Conditions for borrowing by persons who are not companies in terms of Tenure, Rate of Interest and others

Answer 2

Tenure shall be upto 3 years, ROI should not be more than 2% above bank rate, the money repaid shall not be repatriable and the payment shall be made only in NRO accounts.

Question 3

Conditions for borrowing by persons who are companies in terms of Tenure, Rate of Interest and others

Answer 3

Tenure shall be atleast 3 years, ROI should not be more than prime lending rate of SBI, the money shall be borrowed by issuing NCDs

Question 4

Lending by ADs in INR to NRI for acquiring shares under the Employees Stock Option Plan shall be ………………

Answer 4

90% of the Shares acquired or Rs. 20 Lakhs and shall be paid directly to the Company

Question 5

Conditions for Loans in INR given by Resident Individuals to NRI

Answer 5

NRI must be a relative, Loan shall be interest free and shall be paid within 1 year and the amount shall be within LRS limit.

Question 6

Limit of Overdraft by Authorised Dealer to its Branches/Correspondent Banks/Head Office outside India

Answer 6

Rs. 5 Crore ( this limit is an overall limit which includes all branches, head offices, etc.)