10D.7
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Loans to Residents against Shares/Securities/Properties in India of Non-residents
(i)Authorised dealers may grant loans to resident family members of persons of Indian nationality/origin who have gone abroad for employment, etc. (NRI) for land-based agricultural activities against the security of land held by them in India either singly or jointly with other resident members of the family subject to the following conditions:
(a)The loan should be need-based and granted only in cases where the total land holding of the NRI does not exceed five (5) hectares in his individual name or jointly with others. The amount of loan should not exceed Rs.3 lakhs.
(b)The amount of loan should be utilised for carrying on agricultural activities on the existing land holding only and not to be used for acquiring any additional land.
(c)The loan can be repaid out of income generated from the agricultural activity or by remittances in foreign exchange sent by NRI from abroad or by debit to his NRE/FCNR/NRO account.
(d)Requirements regarding security, margin, rate of interest etc. as stipulated by Reserve Bank from time to time should be complied with.
(ii)Applications not covered by sub-paragraph (i) above for grant of loans/overdrafts against pledge of collateral viz. shares/securities of Indian companies or immovable propertty held in India by persons, firms and companies resident outside India should be referred to Reserve Bank for prior approval in form LOV 1.