Liberalised Remittance Scheme (LRS), a resident individual can lend to a Close Relative* NRI/PIO by way of crossed cheque / electronic transfer subject to the following conditions :
- The loan amount should be credited to the NRO A/c of the NRI.
- The loan amount shall not be remitted outside India.
- Loan amount should be within the overall limit under Liberalized Remittance Scheme (LRS) of US$ 250,000 per financial year.
- Loan is free of interest.
- Minimum maturity of the loan is one year.
- Loan should be utilized for meeting the borrower’s personal requirements or for his own business purposes in India.
- The loan shall not be utilised, either singly or in association with other person, for any of the activities in which investment by persons resident outside India is prohibited in certain sectors.
- Repayment of loan shall be made by way of inward remittances through normal banking channels or by debit to the NRO / NRE / FCNR account of the borrower.
Particulars | Relatives | Others |
Loan in Indian Rupees | Permitted To NRO A/c | Not permitted |
Loans in Foreign Currency | Not Permitted | Not Permitted |
