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Q. Who is a NRI?

A. Foreign Exchange Regulation Act of 1973 a NRI as "a person who has gone out of India or who stays outside India, in either case - for or on taking up employment outside India, or for carrying on outside India a business or vocation outside India, or for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period."

Q. Is the permission of The Reserve Bank Of India required for NRIs to purchase residential or commercial property in India?

A. No.

Q. Is an NRI who has purchased residential or commercial property required to file any documents with Reserve Bank of India?

A. "An NRI who has purchased residential / commercial property under general permission is not required to file any documents with the Reserve Bank."

Q. What are the Reserve Bank guidelines regarding Investment in immovable Property by a NRI

A. An NRI: "May acquire immovable property in India other than agricultural/plantation property or a farmhouse out of repatriable and non-repatriable funds.

          In respect of such investments NRIs are eligible to repatriate Sale proceeds of immovable property acquired in India to the extent of repatriable funds used for acquiring the property, without any lock-in period, up to two residential properties. The balance will be repatriable through NRO Account subject to conditions mentioned at item (I) (d).

          Refund of (a) application / earnest money / purchase consideration made by house-building agencies/seller on account of non-allotment of flats / plots and (b) cancellation of booking/deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR(B) account/inward remittances."

          Housing Loan in rupees availed of by NRIs from ADs / Housing Financial Institutions can be repaid by the close relatives in India of the borrower.

Q. Can foreign citizens of Indian origin acquire commercial properties in India?

A. "Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration."

Q. Can a NRI returning back to India hold or transfer immovable property situated outside India?

A. A returning NRI : " may continue to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India, if such currency, security or property was acquired, held or owned when resident outside India." "may open, hold and maintain with an authorized dealer in India a Resident Foreign Currency (RFC) Account to transfer balances held in NRE/FCNR(B) accounts. Proceeds of assets held outside India at the time of return, can be credited to RFC account. The funds in RFC accounts are free from all restrictions regarding utilization of foreign currency balances including any restriction on investment in any form outside India."

Q. What are the criteria regarding availment of home loans for NRIs in India?

A. According to Reserve Bank guidelines for NRIs 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.

Q. Can a NRI give a Power of Attorney to a person in India for completion of loan formalities on their behalf?

A. Yes, We very well understand that as an NRI you have a different set of needs with respect to your real estate management and investment requirements and we also understand that it needs special set of services to cater to your requirements. The good news from India is that government has allowed 100% repatriation for NRIs.

           Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC,LIC Housing Finance Ltd.,etc. to grant housing loans to non-resident Indian nationals for acquisition of houses/flats for self-occupation subject to certain conditions.