For personal purposes or for carrying on business activities except for the purposes of relending, carrying on agricultural or plantation activity or of investment in real estate loan against deposit can be granted.
The loan should be repaid from fresh inward remittances or from NRE or FCNR deposit. The loan can also be repaid out of local rupee resources in the NRO account and in such cases commercial rate of interest should be charged.
For Third Parties
Banks may grant loan against NRE deposits to resident individuals or firms or companies subject to following conditions:
There should be no direct or indirect foreign exchange consideration for the non-resident depositor
Regulations relating to margin, interest rate, purpose of loan, etc., stipulated by RBI should be complied with
Loan should be utilized for personal or business purposes other than agricultural or plantation, real estate or for relending
Usual norms applicable in the case of advances to trade or industry shall be applicable to such credit facilities
Loan outside India
Banks may allow their branches or correspondents outside India to grant loan against deposits in favour of non-resident depositor or to third parties.
