NRI Corner

Foreign nationals of Indian origin who have held Indian passports in the past or who can claim Indian lineage are known as PIOs and are covered under the general permission act to buy property in India – without filing for permission from the RBI.

However, the payment for the same needs to be done through funds transferred to India through normal banking channels or via funds held in NRE/FCNR(B) accounts. Alternatively, payment can be done through NRO accounts maintained in India. Payments cannot be made from outside India, through foreign currency or through travelers’ cheques.

The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to NRI nationals for acquisition of an NRI house/flat for self-occupation subject to certain conditions.

Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts.

The Reserve Bank of India (RBI) has clarified that Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO), purchasing immovable property in India must pay for the acquisition by funds received in India through normal banking channels by way of inward remittance from outside the country.

The NRIs and Resident Indians can also acquire immovable property in India other than agricultural property, plantation or a farmhouse. It has issued certain directives for sanctioning home loans to Non-Resident Indians.

The guidelines provided are:

• The home loan amount should not exceed 85% of the cost of the dwelling unit, As the remaining 15% needs to be provided by one's own contribution towards the cost of unit financed
• The cost of dwelling unit which is by own contribution financed less the loan amount, can be met from direct remittances from abroad through normal banking channels, the Non-Resident (External) [NR(E)] Account and/ or Non-Resident (Ordinary) [NR (O)] account in India
• However, repayment of the loan, comprising of the principal and interest including all the charges are to be remitted to the HFC from abroad through normal banking channels, the Non-Resident (External) [NR(E)] Account and /or Non-Resident (Ordinary) [NR (O)] account in India

The repayment option for NRIs is that they can pay through the funds held in any non-resident account maintained in accordance with the provisions of the Foreign Exchange Management Act, 1999, and the regulations made by the RBI from time to time.

The documentation required to be submitted by the NRIs are different from the Resident Indians as they are required to submit additional documents, like a copy of the passport and a copy of the works contract, etc. and of course NRIs have to follow certain eligibility criteria in order to get Home Loans in India.

Another vital document required while processing an NRI home loan is the power of attorney (POA). The POA is important because, since the borrower is not based in India; the Home Finance Company would need a 'representative' 'in lieu of' the NRI to deal with and if needed. Although not obligatory, the POA is usually drawn on the NRI's parents/wife/children/ close relatives or friends.

THE DOCUMENTS NEEDED FOR OBTAINING NRI HOME LOANS ARE BANK SPECIFIC. THE GENERAL LIST OF DOCUMENTS ARE AS MENTIONED BELOW:

1. Passport and Visa.

2. A copy of the appointment letter and contract from the company employing the applicant.

3. The labor card/identity card (translated in English and countersigned by the consulate) if the person is employed in the Middle East Salary certificate (in English) specifying name, date of joining, designation and salary details.

Bank Statements for the last six months.

LIST OF CLASSIFIED DOCUMENTS FOR SALARIED AND SELF EMPLOYED NRI APPLICANTS. BANKS MAY HAVE SPECIFIC REQUIREMENTS APART FROM THE BELOW-LISTED DOCUMENTS.

1. SALARIED NRI APPLICANTS

2. Copy of valid passport showing VISA stamps.

3. Copy of valid visa/work permit/equivalent document supporting the NRI status of the proposed account holder.

4. Overseas Bank A/C for the last 3 months showing salary credits.

5. Latest contract copy evidencing Salary / Salary Certificate / Wage Slips.

SELF-EMPLOYED NRI APPLICANTS

1. Passport copy with valid visa stamp.

2. Brief Profile of the applicant and business/ Trade license or equivalent document.

3. 6 months overseas bank account statement and NRE/ NRO account.

4. Computation of income, P&L account and B/Sheet for last 3 years certified by the C.A. / CPA or any other relevant authority as the case may be (or equivalent company accounts).

The following is the list (non-exhaustive) of documents required for NRIs to buy property in India:

1. PAN card (Permanent account number)

2. OCI / PIO card (In case of OCI / PIO)

3. Passport (In case of NRI)

4. Passport size photographs

5. Address proof